Lonyx Telecommunications produces components for the telecommunication systems.
ID: 2515684 • Letter: L
Question
Lonyx Telecommunications produces components for the telecommunication systems.
Initially the company manufactured the parts for its own networks, but it gradually
began selling them to other companies as well.
a.
Collections on account, $149,000.
b.
Marketing and general expenses incurred and paid, $25,000.
c.
Paid $38,000 on account.
d.
Material 24500s purchases on credit, glass substrate of $24,500; indirect
materials, $4,600.
e.
Materials used in production (requisitioned):
1. Job 120, glass substrate, $750
2. Job 121, glass substrate, $7,800
3. Indirect Materials, $2,000
f.
Manufacturing wages incurred during April, $38,000 of which $36,000
was paid.
g.
Labor time records for the month: Job 120, $4,000; Job 121, $18,000;
indirect labor, $16,000.
h.
Depreciation on plant and equipment (debit overhead) $2,400.
i.
Manufacturing overhead was allocated at the predetermined rate of
70% of direct labor dollars.
j.
Jobs completed during the month; Job 120.
k.
Credit Sales on account: Job 120 for $10,000.
l.
Closed the manufacturing overhead account to Cost of Goods Sold.
Prepare journal entries for the above transactions.
Lonyx Telecommunications produces components for the telecommunication systems.
Initially the company manufactured the parts for its own networks, but it gradually
began selling them to other companies as well.
a.
Collections on account, $149,000.
b.
Marketing and general expenses incurred and paid, $25,000.
c.
Paid $38,000 on account.
d.
Material 24500s purchases on credit, glass substrate of $24,500; indirect
materials, $4,600.
e.
Materials used in production (requisitioned):
1. Job 120, glass substrate, $750
2. Job 121, glass substrate, $7,800
3. Indirect Materials, $2,000
f.
Manufacturing wages incurred during April, $38,000 of which $36,000
was paid.
g.
Labor time records for the month: Job 120, $4,000; Job 121, $18,000;
indirect labor, $16,000.
h.
Depreciation on plant and equipment (debit overhead) $2,400.
i.
Manufacturing overhead was allocated at the predetermined rate of
70% of direct labor dollars.
j.
Jobs completed during the month; Job 120.
k.
Credit Sales on account: Job 120 for $10,000.
l.
Closed the manufacturing overhead account to Cost of Goods Sold.
Prepare journal entries for the above transactions.
Explanation / Answer
Journal Entries S. no. Accounts title and explanations Debit $ Credit $ A. Cash Account Dr. 149000 Accounts receivable 149000 b. Sselling and Admn Overheads Dr. 25000 Cash Account 25000 c. Accounts payable Dr. 38000 Cash Account 38000 d. Raw material Inventory Dr. 29100 Accounts payable 29100 e. Wwork in process (Job no. 120) Dr. 750 Work in Process (Job no. 121) Dr. 7800 factory Overheads Dr. 2000 Raw material Inventory Account 10550 f. Manufacturing Wages Dr. 38000 Cash Account 36000 Wages payable 2000 g. Wwork in process (Job no. 120) Dr. 4000 Work in Process (Job no. 121) Dr. 18000 factory Overheads Dr. 16000 Manufacturing Wages 38000 h. Factory Overheads Dr. 2400 Accumulated Depreciation 2400 i. Wwork in process (Job no. 120) Dr. 2800 Work in Process (Job no. 121) Dr. 12600 Factory Overheads 15400 j. Finished Goods inventory Dr. 7550 Work in Proccess (Job no.120) 7550 k. Accounts receivable Dr. 10000 sales revenue 10000 Cost of Goods sold Dr. 7500 Finished Goods inventory 7500 l. Cost of Goods sold Dr. (2000+16000+2400-15400) 5000 Factory overheads 5000
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