Required information Problem 153A Source documents journal e

Required information

Problem 15-3A Source documents, journal entries, and accounts in job order costing LO P1, P2, P3

[The following information applies to the questions displayed below.]

Widmer Watercraft’s predetermined overhead rate for the year 2017 is 200% of direct labor. Information on the company’s production activities during May 2017 follows.

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a. Purchased raw materials on credit, $200,000.

b. Materials requisitions record use of the following materials for the month.

130,400

c. Paid $15,250 cash to a computer consultant to reprogram factory equipment.

d. Time tickets record use of the following labor for the month. These wages were paid in cash.

e. Applied overhead to Jobs 136, 138, and 139.

f. Transferred Jobs 136, 138, and 139 to Finished Goods.

g. Sold Jobs 136 and 138 on credit at a total price of $545,000.

h. The company incurred the following overhead costs during the month (credit Prepaid Insurance for expired factory insurance).

i. Applied overhead at month-end to the Work in Process Inventory account (Jobs 137 and 140) using the predetermined overhead rate of 200% of direct labor cost.

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Problem 15-3A Part 2

2. Prepare journal entries to record the events and transactions a through i.

Solution

A. Material a/c dr 200,000

To creditor a/c. 200,000

B. Job/ work in progress a/c. Dr. 130400

Overhead a/c. Dr. 21500

To material a/c. 151900

C. Repairs and maintenance a/c. Dr. 15250

To cash. 15250

D. Job/work in progress a/c. Dr. 103,500

Overhead a/c dr. 24500

To cash a/c. 128000

E. Finished goods a/c. Dr. 179000

To overhead a/c. 179000

F. Finished goods a/c. . Dr. 161400

To job a/c / work in progress a/c. 161400

G. Cost of goods sold a/c. Dr. 1188000

To finished. Goods a/c. 1188000

H. Overhead a/c dr 154000

To expenses. 154000

I job a/c / wip a/c. 21000

To overhead a/c. 21000