Purl of Great Price Company Maria Young is the sole stockholder of Purl of Great Price Company (POGP Company), which produces high-end knitted sweaters and sweater vests for sale to retail outlets. The company started in January of the current year, and employs three knitters (each of whom work 40 hours per week) and one office manager/knitting supervisor (this employee works 20 hours per week as office manager, and 20 hours per week as knitting supervisor). All wages are paid in cash at the end of each month. Each knitter has a knitting machine that is used about 2/3 of the knitter's time, the rest of the knitter's time being involved in hand knitting and piecing together the garments. The company also has a packaging machine used to wrap the garments in plastic for shipping, which is operated by the office manager/knitting supervisor approximately 5 hours per week. The knitting machines were purchased on January 1 of the current year, and cost $2,400 each, with an anticipated useful life of 10 years and no salvage value. The packaging machine was purchased on the same date and cost $4,800, with the same anticipated useful life and salvage value. Nov. 30 Trial Balance POGP Company Trial Balance November 30, 20Y8 Account Title Debit Credit Cash 20,000 Accounts Receivable 1,000 Supplies 200 Materials 5,000 Work in Process 5,404 Equipment 12,000 Accumulated Depreciation Equipment 825 Accounts Payable 150 Common Stock 10,000 Retained Earnings 12,000 Dividends 18,096 Sales 307,500 Cost of Goods Sold 255,040 Factory Overhead 15 Wages Expense 13,750 330,490 330,490 Predetermined Factory Overhead Rate Since the company is more reliant on labor than machines, Maria decides to use direct labor hours (DLH) as the activity base for her predetermined factory overhead rate, rather than machine hours (MH). Estimated Selected Amounts for the Year Estimated depreciation on equipment $1,200 Estimated total Office Manager/Knitting Supervisor wages $42,000 Estimated office utilities $6,000 Estimated factory utilities $4,800 Estimated factory rent $24,000 Activity Base Data Estimated number of DLH for the year 5,000 Estimated number of MH for the year 3,500 Compute the predetermined factory overhead rate for the current year. $15.60 per DLH X Materials Requisition Date: Dec. 10 Reg. No. 12255 Job No. 83 Description Qty. Issued Unit Price Amount Yarn type B 600 skeins $5 $3,000 Total issued $3,000 Time Ticket No. 1255 Name: Susan Blake Work Description: Knitting/piecing Dates Job No. Hours Worked Unit Price Amount 12/01-12/15 62 65 $15 $975 12/16-12/31 83 103 15 1,545 Total Cost $2,520 Time Ticket No. 2274 Name: Josh Porter Work Description: Knitting/piecing Dates Job No. Hours Worked Unit Price Amount 12/01-12/15 62 75 $15 $1,125 12/16-12/31 83 88 15 1,320 Total Cost $2,445 Time Ticket No. 3923 Name: Mary Jones Work Description: Knitting/piecing Dates Job No. Hours Worked Unit Price Amount 12/01-12/15 62 60 $15 $900 12/16-12/31 83 109 15 1,635 Total Cost $2,535 Job 62 100 units: Sweaters Direct Materials Direct Labor Factory Overhead Total Balance Dec. 1 $5,000 $300 $104 $5,404 Dec. 15 3,000 3,120 X 6,120 Total Cost $5,000 3,300 3,224 X $ 11,524 X Unit Cost 115.24 Job 83 200 units: Sweater vests Direct Materials Direct Labor Factory Overhead Total Job Cost Balance Dec. 1 SO $0 $0 SO Dec. 10 3,000 0 0 3,000 Dec. 31 0 4,500 4,680 9,180 Total Cost 3,000 4,500 4,680 $ 12,180 X Journal On December 10, POGP Company receives an order for 200 sweater vests and assigns to Work in Process. If an amount box does not require an entry, leave it blank. Dec. 10 Work in Process 3,000 Materials 3.000 On December 15, review the Time Ticket tables to journalize the entry to record the ad require an entry, leave it blank. Dec. 15 Work in Process 3,000 Wages Payable 3,000 M On December 15, review the Time Ticket tables to journalize the entry to record the ad not require an entry, leave it blank. Dec. 15 Work in Process 1,560 Factory Overhead 1,560 X On December 21, Job 62 is completed. Review the Job Cost Sheets and your journal en require an entry, leave it blank. Dec. 21 Finished Goods 9,964 X Work in Process 9,964 X On December 22, 75 of the 100 sweaters from Job 62 are sold on account for $125 each. Journ a. The entry to record the sale. b. The entry to record the transfer of costs from Finished Goods to Cost of Goods Sold. If an amount box does not require an entry, leave it blank. Dec. 22 Accounts Receivable 9,375 Sales 9,375 Dec. 22 Cost of Goods Sold 7,473 Finished Goods 7,473 On December 31, the last work day of the year for the knitters, review the Time Ticket tables to through December 31. If an amount box does not require an entry, leave it blank. Dec. 31 Work in Process 4,500 Cost of Services X 4,500 On December 31, the last work day of the year for the knitters, review the Time Ticket tables to through December 31. If an amount box does not require an entry, leave it blank. Dec. 31 Work in Process 2,340 Factory Overhead 2,340 On December 31, journalize the following transactions. Note that expenses (b), (c), and (d) were paid in cash.. a. One month's depreciation on equipment b. One month's payroll for all employees c. One month's rent of $2,000 d. One month's factory utilities of $1,275 If an amount box does not require an entry, leave it blank. Dec. 31 Factory Overhead 60 Wages Expense 60 Wages Payable 8,750 Cash 1.250 Accumulated Depreciation-Equipment 10,000 On December 31, prepare the journal entry to dispose of the balance in the factory overhead account. If an an Dec. 31 Factory Overhead X 715 Cost of Goods Sold x 715 Final Question What are the balances in the following accounts as of December 31? If an amount is zero, enter "0". Materials 1,500 Work in Process $ 10,340 Finished Goods $ 2,491 Factory Overhead s 0 Cost of Goods Sold S 7,583 Purl of Great Price Company Maria Young is the sole stockholder of Purl of Great Price Company (POGP Company), which produces high-end knitted sweaters and sweater vests for sale to retail outlets. The company started in January of the current year, and employs three knitters (each of whom work 40 hours per week) and one office manager/knitting supervisor (this employee works 20 hours per week as office manager, and 20 hours per week as knitting supervisor). All wages are paid in cash at the end of each month. Each knitter has a knitting machine that is used about 2/3 of the knitter's time, the rest of the knitter's time being involved in hand knitting and piecing together the garments. The company also has a packaging machine used to wrap the garments in plastic for shipping, which is operated by the office manager/knitting supervisor approximately 5 hours per week. The knitting machines were purchased on January 1 of the current year, and cost $2,400 each, with an anticipated useful life of 10 years and no salvage value. The packaging machine was purchased on the same date and cost $4,800, with the same anticipated useful life and salvage value. Nov. 30 Trial Balance POGP Company Trial Balance November 30, 20Y8 Account Title Debit Credit Cash 20,000 Accounts Receivable 1,000 Supplies 200 Materials 5,000 Work in Process 5,404 Equipment 12,000 Accumulated Depreciation Equipment 825 Accounts Payable 150 Common Stock 10,000 Retained Earnings 12,000 Dividends 18,096 Sales 307,500 Cost of Goods Sold 255,040 Factory Overhead 15 Wages Expense 13,750 330,490 330,490 Predetermined Factory Overhead Rate Since the company is more reliant on labor than machines, Maria decides to use direct labor hours (DLH) as the activity base for her predetermined factory overhead rate, rather than machine hours (MH). Estimated Selected Amounts for the Year Estimated depreciation on equipment $1,200 Estimated total Office Manager/Knitting Supervisor wages $42,000 Estimated office utilities $6,000 Estimated factory utilities $4,800 Estimated factory rent $24,000 Activity Base Data Estimated number of DLH for the year 5,000 Estimated number of MH for the year 3,500 Compute the predetermined factory overhead rate for the current year. $15.60 per DLH X Materials Requisition Date: Dec. 10 Reg. No. 12255 Job No. 83 Description Qty. Issued Unit Price Amount Yarn type B 600 skeins $5 $3,000 Total issued $3,000 Time Ticket No. 1255 Name: Susan Blake Work Description: Knitting/piecing Dates Job No. Hours Worked Unit Price Amount 12/01-12/15 62 65 $15 $975 12/16-12/31 83 103 15 1,545 Total Cost $2,520 Time Ticket No. 2274 Name: Josh Porter Work Description: Knitting/piecing Dates Job No. Hours Worked Unit Price Amount 12/01-12/15 62 75 $15 $1,125 12/16-12/31 83 88 15 1,320 Total Cost $2,445 Time Ticket No. 3923 Name: Mary Jones Work Description: Knitting/piecing Dates Job No. Hours Worked Unit Price Amount 12/01-12/15 62 60 $15 $900 12/16-12/31 83 109 15 1,635 Total Cost $2,535 Job 62 100 units: Sweaters Direct Materials Direct Labor Factory Overhead Total Balance Dec. 1 $5,000 $300 $104 $5,404 Dec. 15 3,000 3,120 X 6,120 Total Cost $5,000 3,300 3,224 X $ 11,524 X Unit Cost 115.24 Job 83 200 units: Sweater vests Direct Materials Direct Labor Factory Overhead Total Job Cost Balance Dec. 1 SO $0 $0 SO Dec. 10 3,000 0 0 3,000 Dec. 31 0 4,500 4,680 9,180 Total Cost 3,000 4,500 4,680 $ 12,180 X Journal On December 10, POGP Company receives an order for 200 sweater vests and assigns to Work in Process. If an amount box does not require an entry, leave it blank. Dec. 10 Work in Process 3,000 Materials 3.000 On December 15, review the Time Ticket tables to journalize the entry to record the ad require an entry, leave it blank. Dec. 15 Work in Process 3,000 Wages Payable 3,000 M On December 15, review the Time Ticket tables to journalize the entry to record the ad not require an entry, leave it blank. Dec. 15 Work in Process 1,560 Factory Overhead 1,560 X On December 21, Job 62 is completed. Review the Job Cost Sheets and your journal en require an entry, leave it blank. Dec. 21 Finished Goods 9,964 X Work in Process 9,964 X On December 22, 75 of the 100 sweaters from Job 62 are sold on account for $125 each. Journ a. The entry to record the sale. b. The entry to record the transfer of costs from Finished Goods to Cost of Goods Sold. If an amount box does not require an entry, leave it blank. Dec. 22 Accounts Receivable 9,375 Sales 9,375 Dec. 22 Cost of Goods Sold 7,473 Finished Goods 7,473 On December 31, the last work day of the year for the knitters, review the Time Ticket tables to through December 31. If an amount box does not require an entry, leave it blank. Dec. 31 Work in Process 4,500 Cost of Services X 4,500 On December 31, the last work day of the year for the knitters, review the Time Ticket tables to through December 31. If an amount box does not require an entry, leave it blank. Dec. 31 Work in Process 2,340 Factory Overhead 2,340 On December 31, journalize the following transactions. Note that expenses (b), (c), and (d) were paid in cash.. a. One month's depreciation on equipment b. One month's payroll for all employees c. One month's rent of $2,000 d. One month's factory utilities of $1,275 If an amount box does not require an entry, leave it blank. Dec. 31 Factory Overhead 60 Wages Expense 60 Wages Payable 8,750 Cash 1.250 Accumulated Depreciation-Equipment 10,000 On December 31, prepare the journal entry to dispose of the balance in the factory overhead account. If an an Dec. 31 Factory Overhead X 715 Cost of Goods Sold x 715 Final Question What are the balances in the following accounts as of December 31? If an amount is zero, enter "0". Materials 1,500 Work in Process $ 10,340 Finished Goods $ 2,491 Factory Overhead s 0 Cost of Goods Sold S 7,583