Bergamo Bay\'s computer system generated the following trial balance on December

Question

Bergamo Bay's computer system generated the following trial balance on December 31, 2015. The company's manager knows something is wrong with the trial balance because it does not show any balance for Work In Process Inventory but does show a balance for the Factory Overhead account. In addition, the accrued factory payroll (Factory Payroll Payable) has not been recorded. Debit Credit Cash Accounts recelvable Raw materials Inventory Work In process Inventory Finished goods Inventory Prepald rent Accounts payable Notes payable Common stock Retalned earnings Sales Cost of goods sold Factory overhead Operating expenses $ 170,000 75,000 80,000 15,000 3,000 S 17,000 25,000 50,000 271,000 373,000 218,000 115,000 60,000 Totals $736,000 $736,000 After examining various files, the manager identifies the following slix source documents that need to be processed to bring the accounting records up to date Materials requisition 21-3010: 10,200 direct materials to Job 402 Materials requisition 21-3011: 18,600 direct materials to Job 404 Materials requisition 21-3012: $5.600 Indirect materials Labor time ticket 6052 Labor time ticket 6053 Labor time ticket 6054 $36,000 direct labor to Job 402 $23.800 direct labor to Job 404 $8,200 Indirect labor Jobs 402 and 404 are the only units in process at year-end. The predetermined overhead rate is 200% of direct labor cost a. Direct materials costs to Work in Process Inventory b. Direct labor costs to Work in Process Inventory c. Overhead costs to Work in Process Inventory d. Indirect materials costs to the Factory Overhead account e. Indirect labor costs to the Factory Overhead account

Explanation / Answer

2.1 Revised Factory Overhead Account Dr Cr Ending balance from the Trial balance $115,000 Work in process inventory 119600 Factoru wages payable $8,200 Raw material Inventory 5600 Underapplied overhead $9,200 Total $128,800 $128,800 2.2 Date General Journal Dr Cr Dec 31`` Cost of Good sold $9,200 Revised factory Overhead Account $9,200 Trial balance December 31,2015 Dr Cr Calcualtion Cash 170000 Accounts Receivable 75000 Raw Material inventory 45600 80000-28800-5600 Work in process Inventory 208200 28800+59800+119600 Finished good inventory 15000 Prepaid Rent 3000 Accounts Payable 17000 Wages payable 68000 59800+8200 Notes Payable 25000 Common stock 50000 Reatianed earnings 271000 Sales 373000 Cost of Good sold 227200 218000+9200 Factory overhead 0 115000-119600+5600+8200-9200 Operating expenses 60000 Total 804000 804000 0 Balance Sheet December 31,2015 Assets Amount Cash 170000 Accounts Receivable 75000 Raw Material inventory 45600 Work in process Inventory 208200 Finished good inventory 15000 Prepaid Rent 3000 Total Assets 516800 Accounts Payable 17000 Wages payable 68000 Notes Payable 25000 Common stock 50000 Reatianed earnings 271000 Net Income 85800 ToTal Liabilities & Equity 516800

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