P19-34B WireComm manufactures specialized components used in wireless com- munic

Question

P19-34B WireComm manufactures specialized components used in wireless com- munication. Initially, the company manufactured the components for its own use, but it gradually began selling them to other wireless companies as well. The trial balance of WireComm's manufacturing operations on January 1, 2009, is as follows WIRECOMM-MANUFACTURING OPERATIONS Tnal BalaDC Cash Accounts receivable $147,000 88,000 Materials Work in process Finished goods 17,000 44,000 61,000 353,000 Plant assets Accounts payable Wages payable Common stock Retained earnings Sales revenues Cost of goods sold 157,000 84,000 5,500 225,000 238,500 Manufactocing overhcad $710,00o January 1 balances in the subsidiary ledgers were Materials ledger: electronic parts,$15,300, indirect materials, $1,700. Work in process ledger: Job 90, $44,000. Finished goods ledger: transmitters, $38,000; power supplies, $23,000. January transactions are summarized as follows a. Payments on account, $81,000. b. Marketing and general expenses incurred and paid, $22,000 c. Collections on account, $195,000. d. Materials purchased on credit: electronic parts, $49,000, indirect materials, $6,000. e. Materials used in production (requisitioned): Job 90: electronic parts, $4,000. Job 91: electronic parts, $38,000 . Indirect materials, $7,000 .

Explanation / Answer

1 & 2...LEDGER ACCOUNTS Materials a/c Beginning balance 17000 d. A/cs payable 55000 e. WIP-Job 90 4000      WIP-Job 91 38000       Mfg. OH -Ind. Mat. 7000 Balance c/d 23000 72000 72000 WIP a/c Beginning balance(Job 90) 44000 e.Materials Job.90 4000     Materials Job 91 38000 f.& g. Mfg. wages          Job 90 6000          Job 91 28000 i.Mfg. OH applied(120%*34000) 40800 j.Finished goods(Job 90) 61200 Balance c/d(Job 91) 99600 160800 160800 Finished goods a/c Beginning balance 61000 j.WIP-Job 90) 61200 k. COGS(Job 90) 61200 Balance c/d 61000 122200 122200 Accounts payable Beginning balance 84000 a.Cash 81000 d.Materials 55000 Balance c/d 58000 139000 139000 Accounts Receivables Beginning balance 88000 c. Cash 195000 k. Sales revenues 125000 Balance c/d 18000 213000 213000 Sales revenues k. Account recivables 125000 COGS a/c k.Finished goods 61200 l.Mfg.OH -OH over applied 4300 Balance c/d 56900 61200 61200 Mfg. OH incurred e. Ind.mat. 7000 f&g. Indirect wages 22000 h. Depn.-Mfg. P&E 7500 i.Mfg. OH applied(120%*34000) 40800 l.COGS-OH over applied 4300 40800 40800 Cash Beginning balance 147000 a. Accounts payable 81000 b. Mkg. & Gen. exp. 22000 c.A/cs. Receivables 195000 f.Mfg. wages 50500 g. Wages payable 5500 Balance c/d 183000 342000 342000 Wages payable Beginning balance 5500 f.Mfg. wages 5500 g.cash 5500 Balance c/d 5500 11000 11000 Mkg. & gen exp. b. cash 22000 Balance c/d 22000 22000 22000 Acc. Depn. P&E Beginning balance 157000 h. Mfg. OH Depn.- 7500 Balance c/d 164500 164500 164500 3..Trial balance as at Jan 31 Cash 183000 Accounts receivables 18000 Inventories Materials 23000 WIP 99600    Finished Goods 61000 Plant assets 353000 Acc. Depn. 164500 Accounts payables 58000 Wages payable 5500 Common stock 225000 Retained earnings 238500 Sales Revenue 125000 COGS 56900 Manufacturing wages MOH Mkg. & General expenses 22000 Total 816500 816500 4.Schedule of Cost of goods manufactured Beginning direct materials 15300 Add: Purchases 49000 Total raw materials available 64300 Less: Ending raw materials inventory 22300 Total raw materials used 42000 Mfg. wages 34000 Mfg. Oh applied(120%*34000) 40800 Total mfg.costs 116800 Add: Beg. WIP Inventory 44000 160800 Less: Ending WIP Inventory 99600 Cost of goods manufactured 61200 5. Schedule of COGS Beginning finished goods 61000 Add: COG Mfd. 61200 Total goods available for sale 122200 Less: Ending Finished goods 61000 Unadjusted COGS 61200 Less: Over applied OH 4300 COGS 56900 Income statement for Jan Sales revenues 125000 Less: COGS 56900 Gross Income 68100 Less:Mkg. & General expenses 22000 Net Income 46100

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