Problem 15-3A Source documents, journal entries, and accounts in job order costing LO P1, P2, P3 [The following information applies to the questions displayed below.] Widmer Watercraft's predetermined overhead rate for year 2015 is 200% of direct labor. Information on the company's production activities during May 2015 follows. a. Purchased raw materials on credit, $220,000. b. Materials requisitions record use of the following materials for the month. Job 136 Job 137 Job 138 $ 48,500 33,000 19,400 22,600 7,400 Job 139 Job 140 Total direct materials Indirect materials 130,900 21,500 Total materials used $152,400 c. Paid $15,500 cash to a computer consultant to reprogram factory equipment. d. Time tickets record use of the following labor for the month. These wages were paid in cash. Job 136 Job 137 Job 138 Job 139 Job 140 $ 12,200 10,700 38,100 39,600 3,600 Total direct labor Indirect labor 104,200 25,500 Total $ 129,700 e. Applied overhead to Jobs 136, 138, and 139. f. Transferred Jobs 136, 138, and 139 to Finished Goods. g. Sold Jobs 136 and 138 on credit at a total price of $525,000. h. The company incurred the following overhead costs during the month (credit Prepaid Insurance for expired factory insurance). Depreciation of factory building Depreciation of factory equipment Expired factory insurance Accrued property taxes payable $69,000 37,000 11,000 37,000 i. Applied overhead at month-end to the Work in Process Inventory account (Jobs 137 and 140) using the predetermined overhead rate of 200% of direct labor cost. Problem 15-3A Part 1 Required: 1. Prepare a job cost sheet for each job worked on during the month. Job No. 136 Job No. 137 Job No. 138 Job No. 139 Job No. 140 Materials Labor Overhead Total cost $ 0 $ 0 $ 0 $ 0 $ 0 Problem 15-3A Part 2 2. Prepare journal entries to record the events and transactions a through i. View transaction list View journal entry worksheet No Transaction Debit Credit 1 a. General Journal Raw materials inventory Accounts payable 2 b. Work in process inventory Factory overhead Raw materials inventory 3 C. Factory overhead Cash 4 d. Work in process inventory Factory overhead Cash 5 e. Work in process inventory Factory overhead 6 f. Finished goods inventory Work in process inventory 7 g(1). Accounts receivable Sales 8 g(2) Cost of goods sold Finished goods inventory 9 h. Factory overhead Accum. depreciation Factory building Accum. depreciation Factory equipment Prepaid insurance Property taxes payable 10 i. Work in process inventory Factory overhead Problem 15-3A Part 3 3. Prepare T-accounts for each of the following general ledger accounts, each of which started the month with a zero balance: Raw Materials Inventory, Work in Process Inventory, Finished Goods Inventory, Factory Payroll , Factory Overhead, Cost of Goods Sold. Post the journal entries from Part 2 to the following T-accounts Raw Materials Inventory Work in Process Inventory End.bal. End.bal. 0 Factory Overhead Finished Goods Inventory End.bal. End.bal. 0 Cost of Goods Sold End.bal. Problem 15-3A Part 4 4. Prepare a report showing the total cost of each job in process and prove that the sum of their costs equals the Work in Process Inventory account balance. Prepare similar reports for Finished Goods Inventory and Cost of Goods Sold. Report of Job Costs Work in Process Inventory 0 Balance Finished Goods Inventory Balance 0 Cost of Goods Sold Balance $ 0
