Problem 5-21 T-Accounts; Overhead Rates; Journal Entries (LO3, LO4, LOS, LO7] Kenworth Company uses a job-order costing system. Only three jobs-Job 105, Job 106, and Job 107-were 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 company's operating year. Data from the job cost sheets of the three jobs follow: Job Cost Sheet Job 105 Job 106 Job 107 $ 18,100 $ 10,900 $ $ 14,600 $ 8,600 $ $ 23,360 $ 13,760 $ 0 0 0 November costs incurred: Direct materials Direct labour Manufacturing overhead December costs incurred: Direct materials Direct labour Manufacturing overhead $ 0 $ 9,000 $ 24,500 $ 5,200 $ 6,800 $ 11,600 ? ? ? 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: $ 44,800 Raw Materials Work in Process Finished Goods $ 93,000 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. Beg. Bal. Beg. Bal. Raw Materials 44,800 38,700 a. 6,100 Work in Process 89,320 33,500 69,580 e 23,600 53,600 130,440 End. Bal. End. Bal. Manufacturing Overhead Beg. Bal. Beg. Bal. Finished Goods 93,000 69,580 162,580 5,200 53,600 End. Bal. End. Bal. 48,400 Salaries & Wages Payable Accounts Payable Beg. Bal. Beg. Bal. End. Bal. End. Bal. 0 2. Prepare journal entries for December as 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 $5,200. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list View journal entry worksheet General Journal Debit Credit No Event 11 Work in process Manufacturing overhead Raw materials b. Prepare an entry to record the incurrence of labour cost, and post the entry to appropriate T-accounts. (In the case of direct labour cost, it is not necessary to make a separate entry for each job.) Indirect labour cost totalled $9,600 for December. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list View journal entry worksheet General Journal Debit Credit No Event 11 Work in process Manufacturing overhead Salaries and wages payable c. Prepare an entry to record the incurrence of $21,160 in various actual manufacturing overhead costs for December (credit Accounts Payable). Post this entry to the appropriate T-accounts. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list View journal entry worksheet No Event General Journal Debit Credit Manufacturing overhead Accounts payable 3-a. What apparent predetermined overhead rate does the company use to assign overhead cost to jobs? Predetermined overhead rate 160 % 3-b. Prepare a journal entry to record the application of overhead cost to jobs for December (it is not necessary to make a separate entry for each job). Post this entry to the appropriate T-accounts. (If no entry is required for a transaction/event, select "No journal entry required in the first account field.) View transaction list View journal entry worksheet No Event General Journal Debit Credit 1 Work in process Manufacturing overhead 4. As stated earlier, Job 105 was completed during December. Prepare a journal entry to show the transfer of this job off the production line and into the finished goods warehouse. Post the entry to the appropriate T-accounts. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list View journal entry worksheet General Journal Debit Credit No 1 Event 1 Finished goods Work in process 5. Determine the balance at December 31 in the Work in Process inventory account. How much of this balance consists of costs charged to Job 106? Job 107? Job 106 Job 107 Total Direct materials Direct labour Manufacturing overhead Total cost $ 0 $ 0 $ 0