Gilkison Corporation uses a joborder costing system to assig

Gilkison Corporation uses a job-order costing system to assign manufacturing costs to jobs. At the end of the month it closes out any overapplied or underapplied manufacturing overhead to Cost of Goods Sold. Its balance sheet on October 1 appears below: Gilkison Corporation Balance Sheet October 1 Assets Cash Raw materials Work in process Finished goods Property, plant, and equipment (net) Total assets $ 10,600 $ 4,600 15,600 19,600 39,800 229,600 $280,000 Liabilities and Stockholders Equity: Accounts payable Retained earnings Total liabilities and stockholders\' equity $ 15,300 264,700 $280,000 Summaries of the transactions completed during October appear below: (1) Raw materials purchased on account (2) Raw materials used in production (direct materials) (3) Raw materials used in production (indirect materials) (4) Direct labor paid in cash (5) Indirect labor paid in cash (6) Selling and administrative salaries paid in cash (7) Factory utility costs (on account) (8) Depreciation on PP&E--manufacturing; equipment (9) Depreciation on PP&E--selling; and administration (10) Advertising expenses paid in cash (11) Manufacturing overhead applied to production (12) Cost of goods manufactured (13) Cash sales (14) Cost of goods sold (15) Cash payments to creditors (16) Overapplied (underapplied) overhead $ 66,600 50,600 $ 7,300 $ 95,600 25,600 $ 30,600 12,600 10,600 $ 2,300 $ 15,600 ? 58,800 $196,600 $281,000 $205,600 $ 81,600

Solution

Transactions

Cash

Raw Materials

Work in Process

Finished Goods

Manufacturing overhead

PP&E (net)

=

Accounts payable

Retained Earnings

Beginning balances, October 1

$ 10,600.00

$ 4,600.00

$ 15,600.00

$ 19,600.00

$ 0.00

$ 229,600.00

=

$ 15,300.00

$ 264,700.00

1

$ 66,600.00

=

$ 66,600.00

2

-$ 50,600.00

$ 50,600.00

=

3

-$ 7,300.00

$ 7,300.00

=

4

-$ 95,600.00

$ 95,600.00

=

5

-$ 25,600.00

$ 25,600.00

=

6

-$ 30,600.00

=

-$ 30,600.00

7

$ 12,600.00

=

$ 12,600.00

8

$ 10,600.00

-$ 10,600.00

=

9

-$ 2,300.00

=

-$ 2,300.00

10

-$ 15,600.00

=

-$ 15,600.00

11

$ 58,800.00

-$ 58,800.00

=

12

-$ 196,600.00

$ 196,600.00

=

13

$ 281,000.00

=

$ 281,000.00

14

-$ 205,600.00

=

-$ 205,600.00

15

-$ 81,600.00

=

-$ 81,600.00

16

$ 2,700.00

=

$ 2,700.00

Ending balances at October 30

$ 42,600.00

$ 13,300.00

$ 24,000.00

$ 10,600.00

$ 0.00

$ 216,700.00

=

$ 12,900.00

$ 294,300.00

Gilkison Corporation

Schedule of Cost of Goods sold

For the month ended October 31

Beginning finished goods inventory

$ 19,600.00

Add: Cost of goods manufactured

$ 196,600.00

Cost of goods available for sale

$ 216,200.00

Less: Ending finished goods inventory

$ 10,600.00

Unadjusted Cost of goods sold

$ 205,600.00

Less: Over-applied manufacturing overhead

-$ 2,700.00

Adjusted cost of goods sold

$ 202,900.00

Gilkison Corporation

Income Statement

For the month ended October 31

Sales

$ 281,000.00

Less: Cost of goods sold

$ 202,900.00

Gross profit

$ 78,100.00

Selling and administrative expenses

Salaries

$ 30,600.00

Depreciation expenses

$ 2,300.00

Advertising expenses

$ 15,600.00

$ 48,500.00

Net income

$ 29,600.00

Transactions	Cash	Raw Materials	Work in Process	Finished Goods	Manufacturing overhead	PP&E (net)	=	Accounts payable	Retained Earnings
Beginning balances, October 1	$ 10,600.00	$ 4,600.00	$ 15,600.00	$ 19,600.00	$ 0.00	$ 229,600.00	=	$ 15,300.00	$ 264,700.00
1		$ 66,600.00					=	$ 66,600.00
2		-$ 50,600.00	$ 50,600.00				=
3		-$ 7,300.00			$ 7,300.00		=
4	-$ 95,600.00		$ 95,600.00				=
5	-$ 25,600.00				$ 25,600.00		=
6	-$ 30,600.00						=		-$ 30,600.00
7					$ 12,600.00		=	$ 12,600.00
8					$ 10,600.00	-$ 10,600.00	=
9						-$ 2,300.00	=		-$ 2,300.00
10	-$ 15,600.00						=		-$ 15,600.00
11			$ 58,800.00		-$ 58,800.00		=
12			-$ 196,600.00	$ 196,600.00			=
13	$ 281,000.00						=		$ 281,000.00
14				-$ 205,600.00			=		-$ 205,600.00
15	-$ 81,600.00						=	-$ 81,600.00
16					$ 2,700.00		=		$ 2,700.00
Ending balances at October 30	$ 42,600.00	$ 13,300.00	$ 24,000.00	$ 10,600.00	$ 0.00	$ 216,700.00	=	$ 12,900.00	$ 294,300.00