Question
Q2. The Gamma Company uses a job order costing system. The following activities took place during the month of July: a. Raw materials purchased, $40,000.
Q2. The Gamma Company uses a job order costing system. The following activities took place during the month of July:
a. Raw materials purchased, $40,000.
b. Direct raw materials used in production, $35,000.
c. Salaries and wages cost incurred: Direct labor cost $60,000, indirect labor cost $30,000 and sales salaries $25,000.
d. Factory utility costs incurred, $15,000.
e. Depreciation on factory equipment, $50,000.
f. Advertising expense incurred, $80,000.
g. Manufacturing overhead is applied to jobs, $90,000.
h. Cost of Goods Manufactured for the month, $180,000.
i. Cost of Goods Sold for the month, $150,000 and Sales Revenue for the month, $200,000.
j. The balance in the Manufacturing Overhead account was closed out to Cost of Goods Sold.
Required: [Marks: 20+20=40]
i. Prepare journal entries to record the preceding transactions.
ii. Prepare all relevant T-accounts (must show balances of each t-account).
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