Problem 201A ott Company uses a job order cost system and ap

Problem 20-1A ott Company uses a job order cost system and applies overhead to production on the basis process. The costs incurred prior to January 1 on this job were as follows: direct materials $23,600,d of direct labor costs.On January 1, 2017, Job No. 50 was the only job in rect labor $14,160, and manufacturing overhead $18,880. As of lanuary 1, 3ob No. 49 had been completed at a cost of $106,200 and was part of finished goods inventory. There was a $17,700 balance in the Raw Materials Inventory account. of January, Lott Company began production on Jobs 51 and 52, and completed Jobs 50 and 51. Jobs 49 and 50 were also sold on account during the month for $143,960 and $186,440, respectively. The following additional events occurred during the month. 1. Purchased additional raw materials of $106,200 on account 2. Incurred factory labor costs of $82,600. of this amount $18,880 related to em 3. manufacturing overhead costs as follows: indirect materials $20,060, indirect labor $23,600; depreciation expense on equipment $14,160; and various other rmanufacturing overhead costs on account $18,880. 4. Assigned direct materials and direct labor to jobs as follows Direct Materials Direct Labor Job No. 50 51 52 $11,800 46,020 35,400 $5,900 29,500 23,600

Solution

1. Journal Entries.

S. no

Particulars

Debit

Credit

1

Raw Materials Inventory

TO Accounts Payable

(Being inventory purchased)

106,200

106,200

2

Salaries & Wages Expense

To Labor Payable

TO Payroll Taxes Payable

82,600

63,720

18,880

3

Manufacturing Overheads (20,060+23,600)

Depreciation Expense

Other Manufacturing Costs

TO Cash

TO Accumulated Depreciation

43,660

14,160

18,880

62,540

14,160

2. Journal Entries for assignment

S. no

Particulars

Debit

Credit

1

Work in Progress

TO Raw Materials Inventory

(11,800 + 46,020 + 35,400)

93,220

93,220

2

Work in progress

TO Salaries & Wages

59,000

59,000

3

Work in progress

TO Manufacturing Overheads

76,700

76,700

3. Journal Entry for completed job sheets

Job 50 & 51 are completed during the month. Therefore the costs of 50 & 51 will be journalized.

S. no

Particulars

Debit

Credit

1

Finished Goods Inventory

TO Work in progress

(81,420 + 110,920)

192,340

192,340

4. Journal entry for sale of job sheet

S. no

Particulars

Debit

Credit

1

Accounts Receivable

TO Sale of job 49

143,960

143,960

2

Accounts Receivable

TO Sale of job 50

186,440

186,440

S. no	Particulars	Debit	Credit
1	Raw Materials Inventory TO Accounts Payable (Being inventory purchased)	106,200	106,200
2	Salaries & Wages Expense To Labor Payable TO Payroll Taxes Payable	82,600	63,720 18,880
3	Manufacturing Overheads (20,060+23,600) Depreciation Expense Other Manufacturing Costs TO Cash TO Accumulated Depreciation	43,660 14,160 18,880	62,540 14,160