The following events occurred over the course of a year at Sheridan Corp, which uses a job order costing system: 1. Direct materials purchases totaled 5583.000 Sheridan Corp tracks its direct materials separately from its indirect materials. Purchases were made on account. 2. $133,000 of indirect materials were used in production. Sheridan uses a separate Supplies Inventory account for indirect materials 3. $558,000 of direct materials were used in production 4. The direct labor payroll was $791,000 (credit Wages Payable 5. Other manufacturing overhead costs incurred during the year totaled $676,000 6. Sheridan applies overhead based on a predetermined overhead rate of $23 per machine hour. The company used 52.000 machine hours during the year. 7. During the year, Sheridan transferred goods costing $2,470,000 into the finished Goods Inventory account. 8. Sheridan sold products with a manufacturing cost of $2.398,000 to customers during the year. Debit Credit No. Account Titles and Explanation 1 Direct Materials Inventory 583000 583000 Accounts Payable (To record purchase of direct materials) Indirect Materials 2. 133000 133000 3. 558000 Supplies Inventory (To record use of indirect materials in production) Work in Process inventory Direct Materials Inventory (To record use of direct materials in production) Work in Process Inventory 558000 4. 791000 791000 Wages Payable (To record direct labor payroll) Manufacturing Overhead 5. 676000 Accounts Payable 676000 (To record actual manufacturing overhead) 6. Work in Process inventory 1196000 1196000 Manufacturing Overhead (To record applied manufacturing overhead) 676000 Accounts Payable (To record actual manufacturing overhead) Work in Process Inventory 6 1196000 Manufacturing Overhead 1196000 (To record applied manufacturing overhead) 7. Finished Goods Inventory 2470000 2470000 Work in Process Imrentory (To record transfer of completed goods to Finished Goods Inventory) Cost of Goods Sold 8 2398000 Finished Goods inventory 2398000 (To record cost of goods sold for the period) eTextbook and Media Solution List of Accounts Prepare T-accounts for the following accounts: Direct Materials Inventory. Work in Process inventory. Manufacturing Overhead Control and Finished Goods Inventory. Record the transactions from part (a) in the T-accounts and calculate ending account balances. Assume the following beginning account balances (Post entries in order presented in the problem): Account Direct Materials Inventory Work in Process Inventory Finished Goods Inventory Balance $31.000 $20,000 546,000 Direct Materials Inventory Work in Process Inventory Manufacturing Overhead > > Finished Goods Inventory
