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 Watercrafts predetermined overhead rate for year 2015 is 200% of direct labor. Information on the companys 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 $ 49,500

Job 137 33,500

Job 138 20,200

Job 139 22,800

Job 140 7,000

Total direct materials 133,000

Indirect materials 20,000

Total materials used $ 153,000

c. Paid $15,750 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 $ 12,200

Job 137 10,800

Job 138 37,900

Job 139 39,200

Job 140 4,000

Total direct labor 104,100

Indirect labor 25,000

Total $ 129,100

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 $530,000.

h. The company incurred the following overhead costs during the month (credit Prepaid Insurance for expired factory insurance).

Depreciation of factory building $ 70,000

Depreciation of factory equipment 37,000

Expired factory insurance 11,000

Accrued property taxes payable 36,000

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	$	$	$	$	$

Prepare journal entries to record the events and transactions a through i.

Journal entry worksheet

Transaction Index :

Record raw material purchases on credit.

Record the requisition of direct and indirect materials.

Record payment to computer consultant to reprogram factory equipment.

Record the entry for direct and indirect labor, paid in cash.

Record the entry to apply overhead to jobs 136, 138 and 139.

Record the transfer of completed jobs 136,138 and 139 to finished goods.

Record the entry for sales on account for Jobs 136 and 138.

Record the entry for the cost of sales of Jobs 136 and 138.

Record other factory overhead (depreciation, insurance and property taxes).

Record the entry to apply overhead to Jobs 137 and 140 (Work in Process).

Note: Enter debits before credits.

Transaction	General Journal	Debit	Credit
a.

2.

	General Journal	Debit	Credit

Problem 15-3A Part 2

2.

Prepare journal entries to record the events and transactions a through i.

Journal entry worksheet

Transaction Index :

Record raw material purchases on credit.

Record the requisition of direct and indirect materials.

Record payment to computer consultant to reprogram factory equipment.

Record the entry for direct and indirect labor, paid in cash.

Record the entry to apply overhead to jobs 136, 138 and 139.

Record the transfer of completed jobs 136,138 and 139 to finished goods.

Record the entry for sales on account for Jobs 136 and 138.

Record the entry for the cost of sales of Jobs 136 and 138.

Record other factory overhead (depreciation, insurance and property taxes).

Record the entry to apply overhead to Jobs 137 and 140 (Work in Process).

Note: Enter debits before credits.

Transaction	General Journal	Debit	Credit
a.

+

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

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
Balance	0
Finished Goods Inventory
Balance	0
Cost of Goods Sold
Balance