Quaint Construction, Inc. is a home builder in Arizona, Quaint uses a job order costing system in which each house is a job. Because it constructs houses, the company uses an account titled Construction Overhead. The company applies overhead based on estimated direct labor costs. For the year, it estimated construction overhead of $1,000,000 and total direct labor cost of $2,000,000. The following events occurred during August: i (Click the icon to view the events.) Read the requirements. Requirement 1. Calculate Quaint's predetermined overhead allocation rate for the year. Estimated overhead cost Date 1,000,000 a. AUT Raw Materials Inventory Accounts Payable Estimated direct labor cost 2,000,000 Requirement 2. Prepare journal entries to record the events in the general journal (Record debits first, then credits Exclude explanations from any journal entries.) a. Purchased materials on account, $430,000. Accounts Predetermined overhead allocation rate 50 Debit 430,000 Credit % 430,000 Requirements 1. Calculate Quaint's predetermined overhead allocation rate for the year. 2. Prepare journal entries to record the events in the general journal. 3. T-accounts for Work-in-Process Inventory and Finished Goods Inventory have been opened for you. Post the appropriate entries to these accounts, identifying each entry by letter Determine the ending account balances, assuming that the beginning balances were zero. 4. Add the costs of the unfinished houses, and show that this total amount equals the ending balance in the Work-in-Process Inventory account. 5. Add the costs of the completed house that has not yet been sold, and show that this equals the ending balance in Finished Goods Inventory 6. Compute gross profit on the house that was sold. What costs must gross profit cover for Quaint Construction? Print Done More info a. Purchased materials on account, $430,000 b. Requisitioned direct materials and used direct labor in construction. Recorded the materials requisitioned. Direct Materials Direct Labor House 402 House 403 House 404 House 405 $ 54,000 $ 69,000 63,000 81,000 40,000 34,000 58,000 56,000 c. The company incurred total wages of $250,000. Use the data from Item b to assign the wages. Wages are not yet paid. d. Depreciation of construction equipment, $6,900 e. Other overhead costs incurred: Equipment rentals paid in cash, $35,000, Worker liability insurance expired, $7,000. f. Allocated overhead to jobs. g. Houses completed: 402, 404 h. House sold on account 404 for $240,000 Quaint Construction, Inc. is a home builder in Arizona. Quaint uses a job order costing system in which each house is a job. Because it constructs houses, the company uses an account titled Construction Overhead. The company applies overhead based on estimated direct labor costs. For the year, it estimated construction overhead of $1,000,000 and total direct labor cost of $2,000,000. The following events occurred during August i (Click the icon to view the events.) Read the requirements b. Requisitioned direct materials and used direct labor in construction Record the materials requisitioned. Date Date Accounts Work-in-Process Inventory Raw Materials Inventory Construction Overhead Wages Payable MA c. The company incurred total wages of $250,000. Use the data from Item b to assign the wages. (Assume the wages have not been paid.) Accounts Debit Credit Debit Credit K Quaint Construction, Inc. is a home builder in Arizona. Quaint uses a job order costing system in which each house is a job. Because it constructs houses, the company uses an account titled Construction Overhead. The company applies overhead based on estimated direct labor costs. For the year, it estimated construction overhead of $1,000,000 and total direct labor cost of $2,000,000. The following events occurred during August, (Click the icon to view the events.) Read the requirements. d. Depreciation of construction equipment, $6,900 Date d. Accounts Date Construction Overhead Accumulated Depreciation-Equipment e. Other overhead costs incurred: Equipment rentals paid in cash, $35,000, Worker liability insurance expired, 67,000 (Prepare a single journal entry for this event) Accounts Debit Construction Overhead Accumulated Depreciation-Equipment Credit Debit Credit Quaint Construction, Inc. is a home builder in Arizona. Quaint uses a job order costing system in which each house is a job. Because it constructs houses, the company uses an account titled Construction Overhead. The company applies overhead based on estimated direct labor costs. For the year, it estimated construction overhead of $1,000,000 and total direct labor cost of $2,000,000. The following events occurred during August i (Click the icon to view the events.) Read the requirements f. Allocated overhead to jobs. Date Construction Overhead Date Cash Prepaid Insurance g. Houses completed: 402 404 Accounts Accounts SOS Debit Debit Credit Credit K Quaint Construction, Inc. is a home builder in Arizona. Quaint uses a job order costing system in which each house is a job. Because it constructs houses, the company uses an account titled Construction Overhead. The company applies overhead based on estimated direct labor costs. For the year, it estimated construction overhead of $1,000,000 and total direct labor cost of $2,000,000. The following events occurred during August: i (Click the icon to view the events.) Read the requirements. h. House sold on account 404 for $240,000 Begin by recording the revenue from the sale on account. Do not record the expense related to the sale in this journal entry We will do that in the next step. Date Accounts Date CUR Now record the cost of goods sold from the sale of house 404. Accounts Debit Debit Credit Credit Quaint Construction, Inc. is a home builder in Arizona. Quaint uses a job order costing system in which each house is a job. Because it constructs houses, the company uses an account titled Construction Overhead. The company applies overhead based on estimated direct labor costs. For the year, it estimated construction overhead of $1,000,000 and total direct labor cost of $2,000,000. The following events occurred during August (Click the icon to view the events.) Read the requirements 3 Requirement 3. T-accounts for Work-in-Process Inventory and Finished Goods Inventory have been opened for you. Post the appropriate entries to these accounts, identifying each entry by letter. Determine the ending account balances, assuming that the beginning balances were zero. Click to view the journal entries you prepared above, Work-in-Process Inventory Finished Goods Inventory Requirement 4. Add the costs of the unfinished houses, and show that this total amount equals the ending balance in the Work-in-Process Inventory account Quaint Construction Inc. Reconciliation of Work-in-Process Inventory Subsidiary and Control Accounte Quaint Construction, Inc. is a home builder in Arizona Quaint uses a job order costing system in which each house is a job. Because it constructs houses, the company uses an account titled Construction Overhead. The company applies overhead based on estimated direct labor costs. For the year, it estimated construction overhead of $1,000,000 and total direct labor cost of $2,000,000. The following events occurred during August: (Click the icon to view the events.) Read the requirements Requirement 4. Add the costs of the unfinished houses, and show that this total amount equals the ending balance in the Work-in-Process Inventory account. Unfinished houses: Direct Materials Direct Labor Quaint Construction, Inc. Reconciliation of Work-in-Process Inventory Subsidiary and Control Accounts Total WIP Balance Construction Overhead Total cost equals Ending WIP Inventory Requirement 5. Add the costs of the completed house that has not yet been sold, and show that this equals the ending balance in Finished Goods Inventory. A Quaint Construction, Inc. is a home builder in Arizona. Quaint uses a job order costing system in which each house is a job. Because it constructs houses, the company uses an account titled Construction Overhead. The company applies overhead based on estimated direct labor costs. For the year, it estimated construction overhead of $1,000,000 and total direct labor cost of $2,000,000. The following events occurred during August: (Click the icon to view the events.) Read the requirements Requirement 5. Add the costs of the completed house that has not yet been sold, and show that this equals the ending balance in Finished Goods Inventory Quaint Construction, Inc. Reconciliation of Finished Goods Inventory Subsidiary and Control Accounts Completed, unsold house. Direct Materials Direct Labor Construction Overhead Total cost equals Ending Finished Goods Inventory Requirement 6. Compute gross profit on the house that was sold What costs must gross profit cover for Quaint Construction? Quaint Construction, Inc. is a home builder in Arizona Quaint uses a job order costing system in which each house is a job. Because it constructs houses, the company uses an account titled Construction Overhead. The company applies overhead based on estimated direct labor costs. For the year, it estimated construction overhead of $1,000,000 and total direct labor cost of $2,000,000. The following events occurred during August (Click the icon to view the events) Read the requirements Requirement 6. Compute gross profit on the house that was sold. What costs must gross profit cover for Quaint Construction? Quaint Construction, Inc. Gross profit on Homes Sold In August Gross profit What costs must gross profit cover for Quaint Construction? The gross profit must cover these types of costs: Quaint Construction, Inc. is a home builder in Arizona, Quaint uses a job order costing system in which each house is a job. Because it constructs houses, the company uses an account titled Construction Overhead. The company applies overhead based on estimated direct labor costs. For the year, it estimated construction overhead of $1,000,000 and total direct labor cost of $2,000,000. The following events occurred during August: i (Click the icon to view the events.) Read the requirements. Requirement 1. Calculate Quaint's predetermined overhead allocation rate for the year. Estimated overhead cost Date 1,000,000 a. AUT Raw Materials Inventory Accounts Payable Estimated direct labor cost 2,000,000 Requirement 2. Prepare journal entries to record the events in the general journal (Record debits first, then credits Exclude explanations from any journal entries.) a. Purchased materials on account, $430,000. Accounts Predetermined overhead allocation rate 50 Debit 430,000 Credit % 430,000 Requirements 1. Calculate Quaint's predetermined overhead allocation rate for the year. 2. Prepare journal entries to record the events in the general journal. 3. T-accounts for Work-in-Process Inventory and Finished Goods Inventory have been opened for you. Post the appropriate entries to these accounts, identifying each entry by letter Determine the ending account balances, assuming that the beginning balances were zero. 4. Add the costs of the unfinished houses, and show that this total amount equals the ending balance in the Work-in-Process Inventory account. 5. Add the costs of the completed house that has not yet been sold, and show that this equals the ending balance in Finished Goods Inventory 6. Compute gross profit on the house that was sold. What costs must gross profit cover for Quaint Construction? Print Done More info a. Purchased materials on account, $430,000 b. Requisitioned direct materials and used direct labor in construction. Recorded the materials requisitioned. Direct Materials Direct Labor House 402 House 403 House 404 House 405 $ 54,000 $ 69,000 63,000 81,000 40,000 34,000 58,000 56,000 c. The company incurred total wages of $250,000. Use the data from Item b to assign the wages. Wages are not yet paid. d. Depreciation of construction equipment, $6,900 e. Other overhead costs incurred: Equipment rentals paid in cash, $35,000, Worker liability insurance expired, $7,000. f. Allocated overhead to jobs. g. Houses completed: 402, 404 h. House sold on account 404 for $240,000 Quaint Construction, Inc. is a home builder in Arizona. Quaint uses a job order costing system in which each house is a job. Because it constructs houses, the company uses an account titled Construction Overhead. The company applies overhead based on estimated direct labor costs. For the year, it estimated construction overhead of $1,000,000 and total direct labor cost of $2,000,000. The following events occurred during August i (Click the icon to view the events.) Read the requirements b. Requisitioned direct materials and used direct labor in construction Record the materials requisitioned. Date Date Accounts Work-in-Process Inventory Raw Materials Inventory Construction Overhead Wages Payable MA c. The company incurred total wages of $250,000. Use the data from Item b to assign the wages. (Assume the wages have not been paid.) Accounts Debit Credit Debit Credit K Quaint Construction, Inc. is a home builder in Arizona, Quaint uses a job order costing system in which each house is a job. Because it constructs houses, the company uses an account titled Construction Overhead. The company applies overhead based on estimated direct labor costs. For the year, it estimated construction overhead of $1,000,000 and total direct labor cost of $2,000,000. The following events occurred during August, (Click the icon to view the events.) Read the requirements. d. Depreciation of construction equipment, $6,900 Date d. Accounts Date Construction Overhead Accumulated Depreciation-Equipment e. Other overhead costs incurred: Equipment rentals paid in cash, $35,000, Worker liability insurance expired, 67,000 (Prepare a single journal entry for this event) Accounts Debit Construction Overhead Accumulated Depreciation-Equipment Credit Debit Credit Quaint Construction, Inc. is a home builder in Arizona. Quaint uses a job order costing system in which each house is a job. Because it constructs houses, the company uses an account titled Construction Overhead. The company applies overhead based on estimated direct labor costs. For the year, it estimated construction overhead of $1,000,000 and total direct labor cost of $2,000,000. The following events occurred during August i (Click the icon to view the events.) Read the requirements f. Allocated overhead to jobs. Date Construction Overhead Date Cash Prepaid Insurance g. Houses completed: 402 404 Accounts Accounts SOS Debit Debit Credit Credit K Quaint Construction, Inc. is a home builder in Arizona. Quaint uses a job order costing system in which each house is a job. Because it constructs houses, the company uses an account titled Construction Overhead. The company applies overhead based on estimated direct labor costs. For the year, it estimated construction overhead of $1,000,000 and total direct labor cost of $2,000,000. The following events occurred during August: i (Click the icon to view the events.) Read the requirements. h. House sold on account 404 for $240,000 Begin by recording the revenue from the sale on account. Do not record the expense related to the sale in this journal entry. We will do that in the next step. Date Accounts Date CUR Now record the cost of goods sold from the sale of house 404. Accounts Debit Debit Credit Credit Quaint Construction, Inc. is a home builder in Arizona. Quaint uses a job order costing system in which each house is a job. Because it constructs houses, the company uses an account titled Construction Overhead. The company applies overhead based on estimated direct labor costs. For the year, it estimated construction overhead of $1,000,000 and total direct labor cost of $2,000,000. The following events occurred during August (Click the icon to view the events.) Read the requirements 3 Requirement 3. T-accounts for Work-in-Process Inventory and Finished Goods Inventory have been opened for you. Post the appropriate entries to these accounts, identifying each entry by letter. Determine the ending account balances, assuming that the beginning balances were zero. Click to view the journal entries you prepared above, Work-in-Process Inventory Finished Goods Inventory Requirement 4. Add the costs of the unfinished houses, and show that this total amount equals the ending balance in the Work-in-Process Inventory account Quaint Construction Inc. Reconciliation of Work-in-Process Inventory Subsidiary and Control Accounte Quaint Construction, Inc. is a home builder in Arizona Quaint uses a job order costing system in which each house is a job. Because it constructs houses, the company uses an account titled Construction Overhead. The company applies overhead based on estimated direct labor costs. For the year, it estimated construction overhead of $1,000,000 and total direct labor cost of $2,000,000. The following events occurred during August: (Click the icon to view the events.) Read the requirements Requirement 4. Add the costs of the unfinished houses, and show that this total amount equals the ending balance in the Work-in-Process Inventory account. Unfinished houses: Direct Materials Direct Labor Quaint Construction, Inc. Reconciliation of Work-in-Process Inventory Subsidiary and Control Accounts Total WIP Balance Construction Overhead Total cost equals Ending WIP Inventory Requirement 5. Add the costs of the completed house that has not yet been sold, and show that this equals the ending balance in Finished Goods Inventory. A Quaint Construction, Inc. is a home builder in Arizona. Quaint uses a job order costing system in which each house is a job. Because it constructs houses, the company uses an account titled Construction Overhead. The company applies overhead based on estimated direct labor costs. For the year, it estimated construction overhead of $1,000,000 and total direct labor cost of $2,000,000. The following events occurred during August: (Click the icon to view the events.) Read the requirements Requirement 5. Add the costs of the completed house that has not yet been sold, and show that this equals the ending balance in Finished Goods Inventory Quaint Construction, Inc. Reconciliation of Finished Goods Inventory Subsidiary and Control Accounts Completed, unsold house. Direct Materials Direct Labor Construction Overhead Total cost equals Ending Finished Goods Inventory Requirement 6. Compute gross profit on the house that was sold What costs must gross profit cover for Quaint Construction? Quaint Construction, Inc. is a home builder in Arizona Quaint uses a job order costing system in which each house is a job. Because it constructs houses, the company uses an account titled Construction Overhead. The company applies overhead based on estimated direct labor costs. For the year, it estimated construction overhead of $1,000,000 and total direct labor cost of $2,000,000. The following events occurred during August (Click the icon to view the events) Read the requirements Requirement 6. Compute gross profit on the house that was sold. What costs must gross profit cover for Quaint Construction? Quaint Construction, Inc. Gross profit on Homes Sold In August Gross profit What costs must gross profit cover for Quaint Construction? The gross profit must cover these types of costs: Quaint Construction, Inc. is a home builder in Arizona, Quaint uses a job order costing system in which each house is a job. Because it constructs houses, the company uses an account titled Construction Overhead. The company applies overhead based on estimated direct labor costs. For the year, it estimated construction overhead of $1,000,000 and total direct labor cost of $2,000,000. The following events occurred during August: i (Click the icon to view the events.) Read the requirements. Requirement 1. Calculate Quaint's predetermined overhead allocation rate for the year. Estimated overhead cost Date 1,000,000 a. AUT Raw Materials Inventory Accounts Payable Estimated direct labor cost 2,000,000 Requirement 2. Prepare journal entries to record the events in the general journal (Record debits first, then credits Exclude explanations from any journal entries.) a. Purchased materials on account, $430,000. Accounts Predetermined overhead allocation rate 50 Debit 430,000 Credit % 430,000 Requirements 1. Calculate Quaint's predetermined overhead allocation rate for the year. 2. Prepare journal entries to record the events in the general journal. 3. T-accounts for Work-in-Process Inventory and Finished Goods Inventory have been opened for you. Post the appropriate entries to these accounts, identifying each entry by letter Determine the ending account balances, assuming that the beginning balances were zero. 4. Add the costs of the unfinished houses, and show that this total amount equals the ending balance in the Work-in-Process Inventory account. 5. Add the costs of the completed house that has not yet been sold, and show that this equals the ending balance in Finished Goods Inventory 6. Compute gross profit on the house that was sold. What costs must gross profit cover for Quaint Construction? Print Done More info a. Purchased materials on account, $430,000 b. Requisitioned direct materials and used direct labor in construction. Recorded the materials requisitioned. Direct Materials Direct Labor House 402 House 403 House 404 House 405 $ 54,000 $ 69,000 63,000 81,000 40,000 34,000 58,000 56,000 c. The company incurred total wages of $250,000. Use the data from Item b to assign the wages. Wages are not yet paid. d. Depreciation of construction equipment, $6,900 e. Other overhead costs incurred: Equipment rentals paid in cash, $35,000, Worker liability insurance expired, $7,000. f. Allocated overhead to jobs. g. Houses completed: 402, 404 h. House sold on account 404 for $240,000 Quaint Construction, Inc. is a home builder in Arizona. Quaint uses a job order costing system in which each house is a job. Because it constructs houses, the company uses an account titled Construction Overhead. The company applies overhead based on estimated direct labor costs. For the year, it estimated construction overhead of $1,000,000 and total direct labor cost of $2,000,000. The following events occurred during August i (Click the icon to view the events.) Read the requirements b. Requisitioned direct materials and used direct labor in construction Record the materials requisitioned. Date Date Accounts Work-in-Process Inventory Raw Materials Inventory Construction Overhead Wages Payable MA c. The company incurred total wages of $250,000. Use the data from Item b to assign the wages. (Assume the wages have not been paid.) Accounts Debit Credit Debit Credit K Quaint Construction, Inc. is a home builder in Arizona. Quaint uses a job order costing system in which each house is a job. Because it constructs houses, the company uses an account titled Construction Overhead. The company applies overhead based on estimated direct labor costs. For the year, it estimated construction overhead of $1,000,000 and total direct labor cost of $2,000,000. The following events occurred during August, (Click the icon to view the events.) Read the requirements. d. Depreciation of construction equipment, $6,900 Date d. Accounts Date Construction Overhead Accumulated Depreciation-Equipment e. Other overhead costs incurred: Equipment rentals paid in cash, $35,000, Worker liability insurance expired, 67,000 (Prepare a single journal entry for this event) Accounts Debit Construction Overhead Accumulated Depreciation-Equipment Credit Debit Credit Quaint Construction, Inc. is a home builder in Arizona. Quaint uses a job order costing system in which each house is a job. Because it constructs houses, the company uses an account titled Construction Overhead. The company applies overhead based on estimated direct labor costs. For the year, it estimated construction overhead of $1,000,000 and total direct labor cost of $2,000,000. The following events occurred during August i (Click the icon to view the events.) Read the requirements f. Allocated overhead to jobs. Date Construction Overhead Date Cash Prepaid Insurance g. Houses completed: 402 404 Accounts Accounts SOS Debit Debit Credit Credit K Quaint Construction, Inc. is a home builder in Arizona. Quaint uses a job order costing system in which each house is a job. Because it constructs houses, the company uses an account titled Construction Overhead. The company applies overhead based on estimated direct labor costs. For the year, it estimated construction overhead of $1,000,000 and total direct labor cost of $2,000,000. The following events occurred during August: i (Click the icon to view the events.) Read the requirements. h. House sold on account 404 for $240,000 Begin by recording the revenue from the sale on account. Do not record the expense related to the sale in this journal entry. We will do that in the next step. Date Accounts Date CUR Now record the cost of goods sold from the sale of house 404. Accounts Debit Debit Credit Credit Quaint Construction, Inc. is a home builder in Arizona. Quaint uses a job order costing system in which each house is a job. Because it constructs houses, the company uses an account titled Construction Overhead. The company applies overhead based on estimated direct labor costs. For the year, it estimated construction overhead of $1,000,000 and total direct labor cost of $2,000,000. The following events occurred during August (Click the icon to view the events.) Read the requirements 3 Requirement 3. T-accounts for Work-in-Process Inventory and Finished Goods Inventory have been opened for you. Post the appropriate entries to these accounts, identifying each entry by letter. Determine the ending account balances, assuming that the beginning balances were zero. Click to view the journal entries you prepared above, Work-in-Process Inventory Finished Goods Inventory Requirement 4. Add the costs of the unfinished houses, and show that this total amount equals the ending balance in the Work-in-Process Inventory account Quaint Construction Inc. Reconciliation of Work-in-Process Inventory Subsidiary and Control Accounte Quaint Construction, Inc. is a home builder in Arizona Quaint uses a job order costing system in which each house is a job. Because it constructs houses, the company uses an account titled Construction Overhead. The company applies overhead based on estimated direct labor costs. For the year, it estimated construction overhead of $1,000,000 and total direct labor cost of $2,000,000. The following events occurred during August: (Click the icon to view the events.) Read the requirements Requirement 4. Add the costs of the unfinished houses, and show that this total amount equals the ending balance in the Work-in-Process Inventory account. Unfinished houses: Direct Materials Direct Labor Quaint Construction, Inc. Reconciliation of Work-in-Process Inventory Subsidiary and Control Accounts Total WIP Balance Construction Overhead Total cost equals Ending WIP Inventory Requirement 5. Add the costs of the completed house that has not yet been sold, and show that this equals the ending balance in Finished Goods Inventory. A Quaint Construction, Inc. is a home builder in Arizona. Quaint uses a job order costing system in which each house is a job. Because it constructs houses, the company uses an account titled Construction Overhead. The company applies overhead based on estimated direct labor costs. For the year, it estimated construction overhead of $1,000,000 and total direct labor cost of $2,000,000. The following events occurred during August: (Click the icon to view the events.) Read the requirements Requirement 5. Add the costs of the completed house that has not yet been sold, and show that this equals the ending balance in Finished Goods Inventory Quaint Construction, Inc. Reconciliation of Finished Goods Inventory Subsidiary and Control Accounts Completed, unsold house. Direct Materials Direct Labor Construction Overhead Total cost equals Ending Finished Goods Inventory Requirement 6. Compute gross profit on the house that was sold What costs must gross profit cover for Quaint Construction? Quaint Construction, Inc. is a home builder in Arizona Quaint uses a job order costing system in which each house is a job. Because it constructs houses, the company uses an account titled Construction Overhead. The company applies overhead based on estimated direct labor costs. For the year, it estimated construction overhead of $1,000,000 and total direct labor cost of $2,000,000. The following events occurred during August (Click the icon to view the events) Read the requirements Requirement 6. Compute gross profit on the house that was sold. What costs must gross profit cover for Quaint Construction? Quaint Construction, Inc. Gross profit on Homes Sold In August Gross profit What costs must gross profit cover for Quaint Construction? The gross profit must cover these types of costs: Quaint Construction, Inc. is a home builder in Arizona. Quaint uses a job order costing system in which each house is a job. Because it constructs houses, the company uses an account titled Construction Overhead. The company applies overhead based on estimated direct labor costs. For the year, it estimated construction overhead of $1,000,000 and total direct labor cost of $2,000,000. The following events occurred during August: i(Click the icon to view the events.) Read the requirements. Requirement 1. Calculate Quaint's predetermined overhead allocation rate for the year. Estimated overhead cost Date 1,000,000 a. AUT Raw Materials Inventory Accounts Payable Estimated direct labor cost 2,000,000 Requirement 2. Prepare journal entries to record the events in the general journal (Record debits first, then credits Exclude explanations from any journal entries.) a. Purchased materials on account, $430,000. Accounts Predetermined overhead allocation rate 50 Debit 430,000 Credit % 430,000 Requirements 1. Calculate Quaint's predetermined overhead allocation rate for the year. 2. Prepare journal entries to record the events in the general journal. 3. T-accounts for Work-in-Process Inventory and Finished Goods Inventory have been opened for you. Post the appropriate entries to these accounts, identifying each entry by letter Determine the ending account balances, assuming that the beginning balances were zero. 4. Add the costs of the unfinished houses, and show that this total amount equals the ending balance in the Work-in-Process Inventory account. 5. Add the costs of the completed house that has not yet been sold, and show that this equals the ending balance in Finished Goods Inventory 6. Compute gross profit on the house that was sold. What costs must gross profit cover for Quaint Construction? Print Done More info a. Purchased materials on account, $430,000 b. Requisitioned direct materials and used direct labor in construction. Recorded the materials requisitioned. Direct Materials Direct Labor House 402 House 403 House 404 House 405 $ 54,000 $ 69,000 63,000 81,000 40,000 34,000 58,000 56,000 c. The company incurred total wages of $250,000. Use the data from Item b to assign the wages. Wages are not yet paid. d. Depreciation of construction equipment, $6,900 e. Other overhead costs incurred: Equipment rentals paid in cash, $35,000, Worker liability insurance expired, $7,000. f. Allocated overhead to jobs. g. Houses completed: 402, 404 h. House sold on account 404 for $240,000 Quaint Construction, Inc. is a home builder in Arizona. Quaint uses a job order costing system in which each house is a job. Because it constructs houses, the company uses an account titled Construction Overhead. The company applies overhead based on estimated direct labor costs. For the year, it estimated construction overhead of $1,000,000 and total direct labor cost of $2,000,000. The following events occurred during August (Click the icon to view the events.) Read the requirements b. Requisitioned direct materials and used direct labor in construction Record the materials requisitioned. Date Date Accounts Work-in-Process Inventory Raw Materials Inventory Construction Overhead Wages Payable MA c. The company incurred total wages of $250,000. Use the data from Item b to assign the wages. (Assume the wages have not been paid.) Accounts Debit Credit Debit Credit K Quaint Construction, Inc. is a home builder in Arizona. Quaint uses a job order costing system in which each house is a job. Because it constructs houses, the company uses an account titled Construction Overhead. The company applies overhead based on estimated direct labor costs. For the year, it estimated construction overhead of $1,000,000 and total direct labor cost of $2,000,000. The following events occurred during August, (Click the icon to view the events.) Read the requirements. d. Depreciation of construction equipment, $6,900 Date d. Accounts Date Construction Overhead Accumulated Depreciation-Equipment e. Other overhead costs incurred: Equipment rentals paid in cash, $35,000, Worker liability insurance expired, $7.000 (Prepare a single journal entry for this event) Accounts Debit Construction Overhead Accumulated Depreciation-Equipment Credit Debit Credit Quaint Construction, Inc. is a home builder in Arizona. Quaint uses a job order costing system in which each house is a job. Because it constructs houses, the company uses an account titled Construction Overhead. The company applies overhead based on estimated direct labor costs. For the year, it estimated construction overhead of $1,000,000 and total direct labor cost of $2,000,000. The following events occurred during August i (Click the icon to view the events.) Read the requirements f. Allocated overhead to jobs. Date Construction Overhead Date Cash Prepaid Insurance g. Houses completed: 402 404 Accounts Accounts SOS Debit Debit Credit Credit K Quaint Construction, Inc. is a home builder in Arizona. Quaint uses a job order costing system in which each house is a job. Because it constructs houses, the company uses an account titled Construction Overhead. The company applies overhead based on estimated direct labor costs. For the year, it estimated construction overhead of $1,000,000 and total direct labor cost of $2,000,000. The following events occurred during August: i (Click the icon to view the events.) Read the requirements. h. House sold on account 404 for $240,000 Begin by recording the revenue from the sale on account. Do not record the expense related to the sale in this journal entry. We will do that in the next step. Date Accounts Date CUR Now record the cost of goods sold from the sale of house 404. Accounts Debit Debit Credit Credit Quaint Construction, Inc. is a home builder in Arizona. Quaint uses a job order costing system in which each house is a job. Because it constructs houses, the company uses an account titled Construction Overhead. The company applies overhead based on estimated direct labor costs. For the year, it estimated construction overhead of $1,000,000 and total direct labor cost of $2,000,000. The following events occurred during August (Click the icon to view the events.) Read the requirements 3 Requirement 3. T-accounts for Work-in-Process Inventory and Finished Goods Inventory have been opened for you. Post the appropriate entries to these accounts, identifying each entry by letter. Determine the ending account balances, assuming that the beginning balances were zero. Click to view the journal entries you prepared above, Work-in-Process Inventory Finished Goods Inventory Requirement 4. Add the costs of the unfinished houses, and show that this total amount equals the ending balance in the Work-in-Process Inventory account Quaint Construction Inc. Reconciliation of Work-in-Process Inventory Subsidiary and Control Accounte Quaint Construction, Inc. is a home builder in Arizona Quaint uses a job order costing system in which each house is a job. Because it constructs houses, the company uses an account titled Construction Overhead. The company applies overhead based on estimated direct labor costs. For the year, it estimated construction overhead of $1,000,000 and total direct labor cost of $2,000,000. The following events occurred during August: (Click the icon to view the events.) Read the requirements Requirement 4. Add the costs of the unfinished houses, and show that this total amount equals the ending balance in the Work-in-Process Inventory account. Unfinished houses: Direct Materials Direct Labor Quaint Construction, Inc. Reconciliation of Work-in-Process Inventory Subsidiary and Control Accounts Total WIP Balance Construction Overhead Total cost equals Ending WIP Inventory Requirement 5. Add the costs of the completed house that has not yet been sold, and show that this equals the ending balance in Finished Goods Inventory. A Quaint Construction, Inc. is a home builder in Arizona. Quaint uses a job order costing system in which each house is a job. Because it constructs houses, the company uses an account titled Construction Overhead. The company applies overhead based on estimated direct labor costs. For the year, it estimated construction overhead of $1,000,000 and total direct labor cost of $2,000,000. The following events occurred during August: (Click the icon to view the events.) Read the requirements Requirement 5. Add the costs of the completed house that has not yet been sold, and show that this equals the ending balance in Finished Goods Inventory Quaint Construction, Inc. Reconciliation of Finished Goods Inventory Subsidiary and Control Accounts Completed, unsold house. Direct Materials Direct Labor Construction Overhead Total cost equals Ending Finished Goods Inventory Requirement 6. Compute gross profit on the house that was sold What costs must gross profit cover for Quaint Construction? Quaint Construction, Inc. is a home builder in Arizona Quaint uses a job order costing system in which each house is a job. Because it constructs houses, the company uses an account titled Construction Overhead. The company applies overhead based on estimated direct labor costs. For the year, it estimated construction overhead of $1,000,000 and total direct labor cost of $2,000,000. The following events occurred during August (Click the icon to view the events) Read the requirements Requirement 6. Compute gross profit on the house that was sold. What costs must gross profit cover for Quaint Construction? Quaint Construction, Inc. Gross profit on Homes Sold In August Gross profit What costs must gross profit cover for Quaint Construction? The gross profit must cover these types of costs: