The Winston Company estimates that the factory overhead for the following year will be $833,900. The company has decided that the basis for applying factory overhead should be machine hours, which is estimated to be 26,900 hours. The total machine hours for the year was 54,000 hours. The actual factory overhead for the year was $1,697,000.

Required:

(a) Determine the total factory overhead amount applied.

(b) Calculate the overapplied or underapplied amount for the year. Enter the amount as positive values.

(c) Prepare the journal entry to close Factory Overhead into Cost of Goods Sold. Refer to the Chart of Accounts for exact wording of account titles.

CHART OF ACCOUNTS

Winston Company

General Ledger

	ASSETS
110	Cash
121	Accounts Receivable
131	Materials
133	Work in Process
135	Factory Overhead
137	Finished Goods
141	Supplies
142	Prepaid Expenses
181	Land
190	Factory Equipment
191	Accumulated Depreciation

	LIABILITIES
210	Accounts Payable
221	Utilities Payable
251	Wages Payable

	EQUITY
311	Common Stock
340	Retained Earnings
351	Dividends
390	Income Summary

	REVENUE
410	Sales
610	Interest Revenue

	EXPENSES
510	Cost of Goods Sold
520	Wages Expense
531	Insurance Expense
532	Utilities Expense
533	Office Supplies Expense
560	Depreciation Expense
590	Miscellaneous Expense
710	Interest Expense

X

Factory Overhead

(a) Determine the total factory overhead amount applied.

Total factory overhead applied

(b) Calculate the overapplied or underapplied amount for the year. Enter the amount as positive values.

Factory overhead (overapplied or underapplied?) by

$

(c) Prepare the journal entry to close Factory Overhead into Cost of Goods Sold on December 31. Refer to the Chart of Accounts for exact wording of account titles.

PAGE 1

JOURNAL

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT
1
2

Q2:

(a)	Materials purchased on account	$176,000
(b)	Prepaid expenses incurred on account	12,200
(c)	Materials requisitioned:
	For production orders	153,700
	For general factory use	2,700
(d)	Factory labor used:
	On production orders	141,300
	For general factory purposes	12,000
(e)	Depreciation on factory equipment	37,000
(f)	Expiration of prepaid expenses, chargeable to factory	6,100
(g)	Factory overhead costs incurred on account	76,000
(h)	Factory overhead applied, based on machine hours	105,300
(i)	Jobs finished	415,300
(j)	Jobs shipped to customers: Cost	412,000
	Selling price (assume all sold on account)	638,000

Required:

Present entries to record the above summarized operations related to production for a company using a job order cost system. Refer to the Chart of Accounts for exact wording of account titles.

CHART OF ACCOUNTS

General Ledger

	ASSETS
110	Cash
121	Accounts Receivable
131	Materials
133	Work in Process
135	Factory Overhead
137	Finished Goods
141	Supplies
142	Prepaid Expenses
181	Land
190	Factory Equipment
191	Accumulated Depreciation

	LIABILITIES
210	Accounts Payable
221	Utilities Payable
251	Wages Payable

	EQUITY
311	Common Stock
340	Retained Earnings
351	Dividends
390	Income Summary

	REVENUE
410	Sales
610	Interest Revenue

	EXPENSES
510	Cost of Goods Sold
520	Wages Expense
531	Insurance Expense
532	Utilities Expense
533	Office Supplies Expense
560	Depreciation Expense
590	Miscellaneous Expense
710	Interest Expense

X

General Journal

Present entries to record the following summarized operations related to production for a company using a job order cost system on December 31. Refer to the Chart of Accounts for exact wording of account titles.

(a)	Materials purchased on account	$176,000
(b)	Prepaid expenses incurred on account	12,200
(c)	Materials requisitioned:
	For production orders	153,700
	For general factory use	2,700
(d)	Factory labor used:
	On production orders	141,300
	For general factory purposes	12,000
(e)	Depreciation on factory equipment	37,000
(f)	Expiration of prepaid expenses, chargeable to factory	6,100
(g)	Factory overhead costs incurred on account	76,000
(h)	Factory overhead applied, based on machine hours	105,300
(i)	Jobs finished	415,300
(j)	Jobs shipped to customers: Cost	412,000
	Selling price (assume all sold on account)	638,000

PAGE 1

JOURNAL

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24