Watson Manufacturing Company uses a job order cost accounting system and keeps perpetual inventory records. The following transactions occurred in the first month of operations:

1.Purchased raw materials on account, $125,000.

2. An analysis of the requisitions shows the following: Direct materials requisitioned during the month:

Job 101 $24,000

Job 102 18,000

Job 103 29,000

$71,000

3. Factory labor costs incurred were $85,000 of which $71,000 pertained to factory wages payable and $14,000 pertained to employer payroll taxes payable.

4. An analysis of the time tickets indicated the following: Direct labor incurred and charged to jobs during the month was:

Job 101 $30,000

Job 102 26,000

Job 103 20,000

$76,000

5.Incurred manufacturing overhead costs as follows: indirect labor $10,000, indirect materials $5,000, and depreciation $8,000. Also, incurred $30,000 of manufacturing overhead costs on account.

6.Manufacturing overhead was applied to jobs worked on using a predetermined overhead rate based on 105% of direct labor costs.

7.Job 101 consisting of 2,000 units and Job 103 consisting of 1,000 units were completed during the month. (Note: show your work in part b. below.)

8.Job 101 was sold on account for $97,000.

Instructions:

a.Prepare journal entries to record the above transactions.

b.Compute the cost of Job 101, Job 102 and Job 103 (must be done to finish part 8 above).

c.Compute the balance in the Work-in-Process account at the end of the month.