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PART 1: Bergamo Bay's computer system generated the following trial balance on December 31, 2019. The companys manager knows something is wrong with the trial

PART 1:

Bergamo Bay's computer system generated the following trial balance on December 31, 2019. The companys manager knows something is wrong with the trial balance because it does not show any balance for Work in Process Inventory but does show a balance for the Factory Overhead account. In addition, the accrued factory payroll (Factory Wages Payable) has not been recorded.

Debit Credit
Cash $ 79,000
Accounts receivable 48,000
Raw materials inventory 29,000
Work in process inventory 0
Finished goods inventory 9,000
Prepaid rent 3,000
Accounts payable $ 11,300
Notes payable 14,300
Common stock 30,000
Retained earnings 93,000
Sales 217,400
Cost of goods sold 118,000
Factory overhead 26,000
Operating expenses 54,000
Totals $ 366,000 $ 366,000

After examining various files, the manager identifies the following six source documents that need to be processed to bring the accounting records up to date.

Materials requisition 21-3010: $ 4,400 direct materials to Job 402
Materials requisition 21-3011: $ 7,900 direct materials to Job 404
Materials requisition 21-3012: $ 1,900 indirect materials
Labor time ticket 6052: $ 7,000 direct labor to Job 402
Labor time ticket 6053: $ 13,000 direct labor to Job 404
Labor time ticket 6054: $ 5,000 indirect labor

Jobs 402 and 404 are the only units in process at year-end. The predetermined overhead rate is 150% of direct labor cost.

Problem 02-2A Part 1

  1. Direct materials costs to Work in Process Inventory.
  2. Direct labor costs to Work in Process Inventory.
  3. Overhead costs to Work in Process Inventory.
  4. Indirect materials costs to the Factory Overhead account.
  5. Indirect labor costs to the Factory Overhead account.

Required: 1. Prepare journal entries to assign the above costs.

PART 2:

Bergamo Bay's computer system generated the following trial balance on December 31, 2019. The companys manager knows something is wrong with the trial balance because it does not show any balance for Work in Process Inventory but does show a balance for the Factory Overhead account. In addition, the accrued factory payroll (Factory Wages Payable) has not been recorded.

Debit Credit
Cash $ 79,000
Accounts receivable 48,000
Raw materials inventory 29,000
Work in process inventory 0
Finished goods inventory 9,000
Prepaid rent 3,000
Accounts payable $ 11,300
Notes payable 14,300
Common stock 30,000
Retained earnings 93,000
Sales 217,400
Cost of goods sold 118,000
Factory overhead 26,000
Operating expenses 54,000
Totals $ 366,000 $ 366,000

After examining various files, the manager identifies the following six source documents that need to be processed to bring the accounting records up to date.

Materials requisition 21-3010: $ 4,400 direct materials to Job 402
Materials requisition 21-3011: $ 7,900 direct materials to Job 404
Materials requisition 21-3012: $ 1,900 indirect materials
Labor time ticket 6052: $ 7,000 direct labor to Job 402
Labor time ticket 6053: $ 13,000 direct labor to Job 404
Labor time ticket 6054: $ 5,000 indirect labor

Jobs 402 and 404 are the only units in process at year-end. The predetermined overhead rate is 150% of direct labor cost.

Problem 02-2A Part 2

2-a. Post any entries from part 1 related to factory overhead to the T-account below to determine the amount of under- or overapplied overhead for the year. Determine whether there is any under- or overapplied overhead for the year. 2-b. Prepare the adjusting entry to allocate any over- or underapplied overhead to Cost of Goods Sold, assuming the amount is not material.

2- c. Post a Revised Trial Balance

d. Prepare an income statement for 2019 and a balance sheet as of December 31, 2019.

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