The Polaris Company uses a joborder costing system The follo

The Polaris Company uses a job-order costing system. The following data relate to October, the first month of the company\'s fiscal year a. Raw materials purchased on account, $210,000 b. Raw materials issued to production, $190,000 ($178,000 direct materials and $12,000 indirect materials) C. Direct labor cost incurred, $90,000; indirect labor cost incurred, $110,000 d. Depreciation recorded on factory equipment, $40,000 e. Other manufacturing overhead costs incurred during October, $70,000 (credit Accounts Payable) f. The company applies manufacturing overhead cost to production on the basis of $8 per machine-hour. A total of 30,000 machine-hours were recorded for October and transferred to Finished Goods customers during the month. These goods were sold on account at 25% above cost. g. Production orders costing $520,000 according to their job cost sheets were completed during October h. Production orders that had cost $480,000 to complete according to their job cost sheets were shipped to Required: 1. Prepare journal entries to record the information given above. (If no entry is required for a transaction/event, select \"No journal entry required\" in the first account field.)

Solution

Journal entries No General journal Debit Credit a. Raw materials 210,000 accounts payable 210,000 b. Work in process inventory 178,000 manufacturing overhead 12,000 Raw materials 190,000 c. Work in process inventory 90,000 manufacturing overhead 110,000 Wages payable 200,000 d. Manufacturing overhead 40,000 Accumulated depreciation 40,000 e. Manufacturing overhead 70,000 Accounts payable 70,000 f. Work in process inventory 240000 manufacturing overhead 240,000 (30,000*8) g. Finished goods 520,000 Work in process inventory 520,000 h. Cost of goods sold 480,000 finished goods 480,000 Accounts receivable 600000 sales (480000*125%) 600,000 Manufacturing overhead b. 12,000 f. 240,000 c. 110,000 d. 40,000 e. 70,000 End bal 8,000 Work In process inventory Beg bal 42,000 g. 520,000 b. 178,000 c. 90,000 f. 240,000 end bal 30,000