Problem 5-21 T-Accounts; Overhead Rates; Journal Entries

Kenworth Company uses a job-order costing system. Only three jobsJob 105, Job 106, and Job 107were worked on during November and December. Job 105 was completed on December 10; the other two jobs were still in production on December 31, the end of the companys operating year. Data from the job cost sheets of the three jobs follow:

	Job Cost Sheet
	Job 105	Job 106	Job 107
November costs incurred:
Direct materials	$	20,100		$	12,900		$	0
Direct labour	$	16,600		$	10,600		$	0
Manufacturing overhead	$	24,900		$	15,900		$	0
December costs incurred:
Direct materials	$	0		$	10,000		$	28,500
Direct labour	$	6,700		$	7,800		$	13,600
Manufacturing overhead		?			?			?

The following additional information is available:

a.	Manufacturing overhead is applied to jobs on the basis of direct labour cost.
b.	Balances in the inventory accounts at November 30 were as follows:

Raw Materials	$	50,800
Work in Process		?
Finished Goods	$	103,000

Required:

1.	Prepare T-accounts for Raw Materials, Work in Process, Finished Goods, and Manufacturing Overhead. Enter the November 30 inventory balances given above; in the case of Work in Process, compute the November 30 balance and enter it into the Work in Process T-account.

2.	Prepare journal entries forDecemberas follows:

a.

Prepare an entry to record the issue of materials into production and post the entry to appropriate T-accounts. (In the case of direct materials, it is not necessary to make a separate entry for each job.) Indirect materials used during December totalled $6,700.(If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)