Ravsten Company uses a job-order costing system. On January 1, the beginning of the current year, the company's inventory balances were as follows: Raw materials Work in process Finished goods $24,000 $13,200 $31,600 The company applies overhead cost to jobs on the basis of machine-hours. For the current year, the company estimated that it would work 37,600 machine-hours and incur $161,680 in manufacturing overhead cost. The following transactions were recorded for the year. a. Raw materials were purchased on account: $232,000. b. Raw materials were requisitioned for use in production: $206,000 (85% direct and 15% indirect). c. The following costs were incurred for employee services: Direct labour Indirect labour Sales commissions Administrative salaries $172,800 $ 30,200 $ 40,880 $ 86,400 Chapters 5-7) i Samed Help Save & Exit Submit d. Heat power, and water costs were incurred in the factory: $49,200. e. Prepaid insurance expired during the year. $18,000 (80% relates to factory operations, and 20% relates to selling and administrative activities) f. Advertising costs were incurred, $58,000. g. Depreciation was recorded for the year: $69,600 (75% relates to factory operations, and 25% relates to selling and administrative activities) h. Manufacturing overhead cost was applied to production. The company recorded 43 200 machine-hours for the year. 1. Goods that cost $530,100 to manufacture according to their job cost sheets were transferred to the finished goods warehouse j. Sales for the year totalled $774,400 and were all on account. The total cost to manufacture these goods according to their job cost sheets was $521,900. Required: 1. Prepare journal entries to record the transactions given above. (Do not round intermediate calculations. If no entry is required for a transaction/event, select "No journal entry required in the first account field.) N View transaction list Journal entry worksheet 11 8 > 7 3 2 1 6 5 4 Journal entry worksheet 3 2 3 4 5 6 7 11 Raw materials were purchased on account: $232,000. Ints 01:32:22 Note: Enter debits before credits Transaction General Journal Debit Credit Record entry Clear entry View general Journal 2. Prepare T-accounts for inventories, Manufacturing Overhead, and Cost of Goods Sold. Post relevant data from your journal entries to these T-accounts (don't forget to enter the opening balances in your inventory accounts). Compute an ending balance in each account Raw Materials Manufacturing Overhead Beg. Bal. Beg. Bal End. Bal 0 09 End Bal Work in Process Cost of Goods Sold Beg Bal Beg Bal End. Bal 0 0 End. Bal. Finished Goods in Next 3-a. Is manufacturing overhead underapplied or overapplied for the year? 3. Underapplied overhead O Overapplied overhead 1:21:59 3-b. Prepare a journal entry to properly dispose of any balance in the Manufacturing Overhead account. (Do not round intermediate calculations and round your final answers to 2 decimal places. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet
