on January 4th sold two ice cream systems to Day Dreamer\'s Ice Cream. THe estim
ID: 2461456 • Letter: O
Question
on January 4th sold two ice cream systems to Day Dreamer's Ice Cream. THe estimated direct labor is $8,000.00. The estimated direct material is $2,250.00. The estimated indirect material is $350.00. Day Dreamers is to be billed in the amount of $20,925.00 on account. A check for $5,000.00 will be collected as a deposit against that sale. The start date will bew January 7th. The date Promised will be January 23rd.
The company uses the job order cost system. Markups to determine the selling price of a job for the company are 150% of estemated job costs. All sales are exempt from sales tax, as the company sells locally to resellers.
On January 19th the job was finished.. Direct materials was $2,800.00, indirect materials was $$325.00. Apply from time cards $7,950.00 of direct labor. Applied factory overhead is based on 25% of direct labor cost. Tranfer the completed job to COGS account afrom Direct Material and Indirect Material and for the gross pay and credit FWT Payable and FICA Tax Payable for the appropriate amounts with the net pay foing to salaries payable. FWT Payable is 15% and FICA tax payable its 7.65%.
Please do all of the journal entries needed to show on the books.
Explanation / Answer
Journal entries
Jan-4 Day Dreamers Ice Cream $20925
Sales $20925
(Being Sales made on account)
Jan-7 Bank Account $5000
Day Dreamers Ice Cream $5000
Jan-19 Cost of Goods sold $3125
Direct Materials $2800
Indirect Materials $325
(Being Finished job transfered to COGS)
Jan-19 Finished goods 1987.50
Factory overheads 1987.50
Jan-19 Salary expense 795 0
To FWT Payable 1170
TO FICA Tax payable 608.18
To Salary Payable 6171.82
(Being salary expense booked)
Jan-19 Finished goods 7950
Salary expense 7950
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