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The Polaris Company uses a job-order costing system. The following transactions occurred in October: Raw materials purchased on account, $210,000. Raw materials used in production,

The Polaris Company uses a job-order costing system. The following transactions occurred in October:

  1. Raw materials purchased on account, $210,000.
  2. Raw materials used in production, $188,000 ($150,400 direct materials and $37,600 indirect materials).
  3. Accrued direct labor cost of $49,000 and indirect labor cost of $21,000.
  4. Depreciation recorded on factory equipment, $106,000.
  5. Other manufacturing overhead costs accrued during October, $131,000.
  6. The company applies manufacturing overhead cost to production using a predetermined rate of $5 per machine-hour. A total of 76,500 machine-hours were used in October.
  7. Jobs costing $510,000 according to their job cost sheets were completed during October and transferred to Finished Goods.
  8. Jobs that had cost $451,000 to complete according to their job cost sheets were shipped to customers during the month. These jobs were sold on account at 36% above cost.

Required:

1. Prepare journal entries to record the transactions given above.

2. Prepare T-accounts for Manufacturing Overhead and Work in Process. Post the relevant transactions from above to each account. Compute the ending balance in each account, assuming that Work in Process has a beginning balance of $35,000.

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