Problem 19-4A (Algo) Preparing job cost sheets, recording costs, preparing inventory ledger accounts LO P1, P2, P3

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Watercrafts predetermined overhead rate is 200% of direct labor. Information on the companys production activities during May follows.

1. Purchased raw materials on credit, $260,000.

2. Materials requisitions record use of the following materials for the month.

   Job 136	$ 49,000
   Job 137	32,500
   Job 138	19,200
   Job 139	22,800
   Job 140	7,000
   Total direct materials	130,500
   Indirect materials	20,500
   Total materials requisitions	$ 151,000

3. Time tickets record use of the following labor for the month. These wages were paid in cash.

   Job 136	$ 12,000
   Job 137	10,600
   Job 138	37,500
   Job 139	39,400
   Job 140	3,600
   Total direct labor	103,100
   Indirect labor	25,500
   Total labor cost	$ 128,600

4. Applied overhead to Jobs 136, 138, and 139.
5. Transferred Jobs 136, 138, and 139 to Finished Goods Inventory.
6. Sold Jobs 136 and 138 on credit at a total price of $535,000.
7. Recorded the cost of goods sold for Jobs 136 and 138.

8. Incurred the following actual other overhead costs during the month.

   Depreciation of factory building	$ 68,000
   Depreciation of factory equipment	38,500
   Expired factory insurance	11,000
   Accrued property taxes payable	36,000

9. Applied overhead at month-end to the Work in Process Inventory account (for Job 137 and 140) using the predetermined overhead rate of 200% of direct labor cost.

Problem 19-4A (Algo) Part 3

3. Post the journal entries for the transactions to the following T-accounts, each of which started the month with a zero balance.