PROBLEM IV

INSTRUCTIONS

1. Journalize the entries to record the transactions indentified above.

2. Determine the account balances for Work in Process and Finished Goods.

3. Prepare a schedule of unfinished jobs to support the balances in the work in process account

4. Prepare a schedule of completed jobs on hand to support the balance in the finished goods accounts.

Derby Music Company specializes in producing and packaging compact discs (CDs) for the music recording industry. Derby use a job order cost system. The following data summarize the operations related to production for March, the first month of operations:

a. Materials purchased on account. $15,500.

b. Materials requisitioned and labor used.

?Materials? Factory Labor

Job 100? $2,650?? $1,770

Job 101? 1,240?? 650

Job 102? 980?? 420

Job 103? 3,420?? 1,900

Job 104? 1,000?? 500

Job 105? 2,100?`?? 1,760

For general factory use? 450?? 650

c. Factory overhead costs incurred on account. $2,700

d. Depreciation of machinery. $1,750

e. Factory overhead is applied at a rate of 70% of direct labor cost.

f. Jobs completed: Nos. 100, 101, 102, 104

g. Jobs 100, 101, 102 were shipped and customers were billed for $8,100, $3,800 and $3,500 respectively.