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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 | |||||
Prepare T-accounts to show the flow of costs during the period.
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