Question
The following transactions occurred in January at Apex Manufacturing, a custom parts supplier. Apex uses job costing. Purchased $54,200 in materials on account. Issued $2,000
The following transactions occurred in January at Apex Manufacturing, a custom parts supplier. Apex uses job costing. Purchased $54,200 in materials on account. Issued $2,000 in supplies from the materials inventory to the production department. Paid for the materials purchased in transaction (1). Issued $26,000 in direct materials to the production department. Incurred wage costs of $47,000, which were debited to Payroll, a temporary account. Of this amount, $14,000 was withheld for payroll taxes and credited to Payroll Taxes Payable. The remaining $33,000 was paid in cash to the employees. See transactions (6) and (7) for additional information about Payroll. Recognized $26,000 in fringe benefit costs, incurred as a result of the wages paid in (5). This $26,000 was debited to Payroll and credited to Fringe Benefits Payable. Analyzed the Payroll account and determined that 70 percent represented direct labor; 20 percent, indirect manufacturing labor; and 10 percent, administrative and marketing costs. Paid for utilities, power, equipment maintenance, and other miscellaneous items for the manufacturing plant totaling $32,900. Applied overhead on the basis of 150 percent of direct labor costs. Recognized depreciation of $17,750 on manufacturing property, plant, and equipment. Required: a. Prepare journal entries to record these transactions. b. The balances that appeared in the accounts of Apex Manufacturing are shown as follows. Beginning Ending Materials Inventory $ 56,325 Work-in-Process Inventory 13,125 Finished Goods Inventory 62,750 $ 50,800 Cost of Goods Sold 101,275
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