THIS is your "Bob - Homework"... Exercise 16-2 & Prob 16-1B. This problem is NOT in your textbook. Required: below this problem B (next page) are the "working papers" for you to complete and then submit to the instructor. by the due date. Optional: Below the Prob B "working papers" (scroll 3 pages) are answers to similar, Prob A. If needed, refer to the Prob A to help you complete your problem B assignment. E16-2 Stine Company uses a job order cost system. On May 1, the company has a balance in Work in Process Inventory of $3,500 and two jobs in process: Job No. 429 $2,000, and Job No. 430 $1,500. During May, a summary of source documents reveals the following. Materials Requisition Slips $2,500 3,500 4,400 Labor Job Number Time Tickets $1,900 3,000 7,600 429 430 431 $10,400 800 $12,500 General use 1,200 $13,700 $11,200 Stine Company applies manufacturing overhead to jobs at an overhead rate of 60 % of direct labor cost. Job No. 429 is completed during the month. Instructions (a) Prepare summary journal entries to record (1) the requisition slips, (2) the time tickets, (3) the assignment of manufacturing overhead to jobs, and (4) the completion of Job No. 429. Instructors Note: Beginning WIP (Work-In-Process) has $3,500 composed of amounts already transferred in for jobs 429 and 430 as stated in the problem. (FYI: The 3,500 under Job 430 in Materials Requisition is NOT the same 3,500 that is in WIP-they are different 2 different things). Instruction (a) needs an entry transferring the TOTAL of 10,400 (the "summary" of the job costs) "from" ("out of) RAW MAT INV to WIP. Hence PART of the first entry increases the asset WIP and decreases the asset RAW MAT INV by $10,400. (How do you know to debit WIP?. The three job costs being transferred, totalling $10,400 are Direct Materials - since they are associated with a specific job # ... indirect costs are not associated with any specific job #. They are considered "factory-wide" use or "general" use. ... The other part of the first entry involves increasing the asset MFG OH (manufacturing overhead) by the "general use" materials. Therefore, debit the asset MFG OH (a control account) and decrease the asset RAW MAT by another $800. (Your credit amount should be the total of both debits.) Over head Over head Materials Labor