The following transactions relate to the Decent company for the month of June,2004.

1. Material purchased on account Rs.170,000

1. Material and labor used on jobs were as under.

Job No Direct material Direct labor

01 11,400 5000

02 17,200 14,000

03 7000 18,400

1. Indirect material issued to production Rs. 3800
2. Indirect Labor incurred Rs.500
3. Other factory overhead cost incurred Rs. 6850
4. Depreciation on Machinery Rs.3000
5. Factory overhead is applied at 80% of Direct labor.
6. Jobs No.1 and 2 were completed
7. Customers were billed both jobs at Rs.50,000 and Rs. 26,000 respectively.

INSTRUCTION:

1. Prepare cost sheet showing cost of three jobs
2. Prepare General Journal entries together with closing of under or over applied FOH

QNO.2

Danish Corporation produces special product as to customer specifications and uses the Job Order Cost System. The following data relates to its operations of December 2006.

1. Purchased raw material on account Rs. 60,000.

2. Raw material issued to factory Rs. 43,000 of which Rs. 4,000 was used indirectly.

3. Factor labour used direct Rs. 65,000 and indirect Rs. 5,500.

4. Factory Overhead cost incurred on account Rs. 44,000.

5. Factory Overhead applied at 100% of Direct Labour Cost.

6. Jobs were completed to the extent of 80%.

7. Goods sold on account Rs. 2,00,000.

8. Finished Goods inventory on Dec 31, 2006 Rs. 18,400.

Required:

i. Record the above transactions in journal also close over or under applied factory overhead at the end of month