Knox Company begins operations January 1. Because all work is done to customer s
ID: 2451255 • Letter: K
Question
Knox Company begins operations January 1. Because all work is done to customer specifications, the company decides to use a job order cost system. Prepare a flow chart of a typical job order system with arrows showing the flow of costs. Identify the eight transactions.
During January, its first month of operations, Knox Company accumulated the following manufacturing costs: raw materials $4000 on account, factory labor $6000 of which $5200 relates to factory wages payable and $800 relates to payroll taxes payable and utilities payable $2000. Prepare journal entries for each type of manufacturing cost. In January,
Knox Company requisitions raw materials for production as follows: job 1 $900, job 2 $1400, job 3 $700, and general factory use $600. Prepare a summary journal entry to record raw materials used.
Explanation / Answer
ournal entries in the books of Knox company:
Debit Credit
($) ($)
Jan 31 Manufacturing A/c Dr. 3.600
To Job 1 A/c 900
To Job 2 A/c 1,400
To Job 3 A/c 700
To General Factory A/c 600
(Being raw materials used for production)
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