EX. 111 A selected list of accounts used by Sloan Manufacturing Company follows: Code A Cash B…

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EX. 111

A selected list of accounts used by Sloan Manufacturing Company follows:

            Code

                A      Cash

                B      Accounts Receivable

               C      Raw Materials Inventory

               D      Work In Process Inventory

                E      Finished Goods Inventory

                F      Accounts Payable

               G      Factory Labor

               H      Manufacturing Overhead

                 I      Cost of Goods Sold

                J      Sales

 

Sloan Manufacturing Company uses a job order system and maintains perpetual inventory records.

 

Instructions

Place the appropriate code letter in the columns indicating the appropriate account(s) to be debited and credited for the transactions listed below.

———————————————————————————————————————————

                                                                                                            Account(s)         Account(s)

Transactions                                                                                          Debited             Credited

———————————————————————————————————————————

    1.    Raw materials were purchased on account.

———————————————————————————————————————————

    2.    Issued a check to Estes Machine Shop for

           repair work on factory equipment.

———————————————————————————————————————————

    3.    Direct materials were requisitioned for Job 280.

———————————————————————————————————————————

    4.    Factory labor was paid as incurred.

———————————————————————————————————————————

    5.    Recognized direct labor and indirect labor used.

———————————————————————————————————————————

    6.    The production department requisitioned indirect

           materials for use in the factory.

———————————————————————————————————————————

    7.    Overhead was applied to production based on a

           predetermined overhead rate of $8 per labor hour.

———————————————————————————————————————————

    8.    Goods that were completed were transferred to

            finished goods.

———————————————————————————————————————————

    9.    Goods costing $80,000 were sold for $105,000

           on account.

———————————————————————————————————————————

  10.    Paid for raw materials purchased previously

           on account.

———————————————————————————————————————————

 Ex.  112

Finn Manufacturing Company uses a job order cost accounting system and keeps perpetual inventory records. Prepare journal entries to record the following transactions during the month of June.

 

June  1      Purchased raw materials for $25,000 on account.

 

          8      Raw materials requisitioned by production:

                           Direct materials                                 $6,000

                           Indirect materials                                1,000

 

        15      Paid factory utilities, $2,100 and repairs for factory equipment, $3,000.

 

        25      Incurred $72,000 of factory labor.

 

        25      Time tickets indicated the following:

                           Direct Labor      (4,000 hrs × $12 per hr)    =    $48,000

                           Indirect Labor   (3,000 hrs × $8 per hr)      =      24,000

 

                                                                                                     $72,000Ex.  113

Selected accounts of Kosar Manufacturing Company at year end appear below:

 

            RAW MATERIALS INVENTORY                      WORK IN PROCESS INVENTORY

      (a)               40,000      (d)               30,000            (d)               30,000      (g)                150,000

                                                                                    (e)               70,000

                                                                                    (f)               90,000

 

              FINISHED GOODS INVENTORY                          COST OF GOODS SOLD

      (g)             150,000      (h)             120,000            (h)             120,000

 

                       FACTORY LABOR                                  MANUFACTURING OVERHEAD

      (b)             110,000      (e)               95,000            (c)               75,000      (f)                  90,000

                                                                                    (e)               25,000

 

Instructions

Explain the probable transaction that took place for each of the items identified by letters in the accounts.  For example:

 

 

(a)   Raw materials costing $40,000 were purchased.

 Ex.  114

The gross earnings of factory workers for Dinkel Company during the month of January are $100,000. The employer's payroll taxes for the factory payroll are $12,000. Of the total accumu-lated cost of factory labor, 75% is related to direct labor and 25% is attributable to indirect labor.

 

Instructions

(a)    Prepare the entry to record the factory labor costs for the month of January.

(b)    Prepare the entry to assign factory labor to production.

 

(c)    Prepare the entry to assign manufacturing overhead to production, assuming the predetermined overhead rate is 125% of direct labor cost.

 Ex.  115

Butler Manufacturing uses a job order cost accounting system. On April 1, the company has Work in Process Inventory of $7,600 and two jobs in process: Job No. 221, $3,600, and Job No. 222, $4,000. During April, a summary of source documents reveals the following:

 

For

                                 Materials Requisition Slips            Labor Time Tickets

Job No.  221                            $1,200                                     $2,600

               222                              1,700                                       1,200

               223                              2,400                                       2,900

               224                              2,100                                       2,800

General use                                  600                                          400

Totals                                       $8,000                                     $9,900

 

Butler applies manufacturing overhead to jobs at an overhead rate of 60% of direct labor cost. Job No. 221 is completed during the month.

 

Instructions

(a)    Prepare summary journal entries to record the raw materials requisitioned, factory labor used, the assignment of manufacturing overhead to jobs, and the completion of Job No. 221.

(b)    Calculate the balance of the Work in Process Inventory account at April 30.

 

 

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