Required information The following information applies to th

Required information

[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.

Purchased raw materials on credit, $220,000.

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

132,500

Paid $15,750 cash to a computer consultant to reprogram factory equipment.

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

Applied overhead to Jobs 136, 138, and 139.

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

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

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

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.

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

Record raw material purchases on credit.

Note: Enter debits before credits.

Record the requisition of direct and indirect materials.

Note: Enter debits before credits.

Record payment to computer consultant to reprogram factory equipment.

Note: Enter debits before credits.

Record the entry for direct and indirect labor, paid in cash.

Note: Enter debits before credits.

Record the entry to apply overhead to jobs 136, 138 and 139.

Note: Enter debits before credits.

Record the transfer of completed jobs 136,138 and 139 to finished goods.

Note: Enter debits before credits.

Record the entry for sales on account for Jobs 136 and 138.

Note: Enter debits before credits.

Record the entry for the cost of sales of Jobs 136 and 138.

Note: Enter debits before credits.

Record other factory overhead (depreciation, insurance and property taxes).

Note: Enter debits before credits.

Record the entry to apply overhead to Jobs 137 and 140 (Work in Process).

Note: Enter debits before credits.

Job 136	$	49,000
Job 137		33,500
Job 138		20,200
Job 139		22,800
Job 140		7,000
Total direct materials		132,500
Indirect materials		21,000
Total materials used	$	153,500

Solution

job 136 job 137 job138 job139 job140 total Materials 49,000 33,500 20,200 22,800 7,000 132,500 labor 12,100 10,700 37,900 39,600 3,200 103,500 overhead 24,200 21400 75800 79200 6400 207,000 total 85,300 65,600 133,900 141,600 16,600 443,000 2) TR General Journal Debit Credit a) Raw materials inventory 220,000 Accounts payable 220,000 b) Work in process inventory 132,500 Factory overhead 21,000 Raw materials inventoy 153,500 c) Factory overhead 15,750 cash 15,750 d) Work in process inventory 103,500 Factory overhead 25,500 Cash 129,000 e) Work in process overhead 179,200 Factory overhead 179,200 f) finished goods inventory 360,800 Work in process inventory 360,800 g) Accounts receivable 545,000 Sales 545,000 cost of goods sold 219,200 finished goods inventory 219,200 h) Factory overhead 154,500 Accumulated depreciation-factory building 70,000 Accumulated depreciation-factory equipment 38,000 prepaid insurance 11,000 property taxes payable 35,500 i) work in process inventory 27,800 Factory overhead 27,800