Problem 20-1A ott Company uses a job order cost system and applies overhead to p
ID: 2611481 • Letter: P
Question
Problem 20-1A ott Company uses a job order cost system and applies overhead to production on the basis process. The costs incurred prior to January 1 on this job were as follows: direct materials $23,600,d of direct labor costs.On January 1, 2017, Job No. 50 was the only job in rect labor $14,160, and manufacturing overhead $18,880. As of lanuary 1, 3ob No. 49 had been completed at a cost of $106,200 and was part of finished goods inventory. There was a $17,700 balance in the Raw Materials Inventory account. of January, Lott Company began production on Jobs 51 and 52, and completed Jobs 50 and 51. Jobs 49 and 50 were also sold on account during the month for $143,960 and $186,440, respectively. The following additional events occurred during the month. 1. Purchased additional raw materials of $106,200 on account 2. Incurred factory labor costs of $82,600. of this amount $18,880 related to em 3. manufacturing overhead costs as follows: indirect materials $20,060, indirect labor $23,600; depreciation expense on equipment $14,160; and various other rmanufacturing overhead costs on account $18,880. 4. Assigned direct materials and direct labor to jobs as follows Direct Materials Direct Labor Job No. 50 51 52 $11,800 46,020 35,400 $5,900 29,500 23,600Explanation / Answer
1. Journal Entries.
S. no
Particulars
Debit
Credit
1
Raw Materials Inventory
TO Accounts Payable
(Being inventory purchased)
106,200
106,200
2
Salaries & Wages Expense
To Labor Payable
TO Payroll Taxes Payable
82,600
63,720
18,880
3
Manufacturing Overheads (20,060+23,600)
Depreciation Expense
Other Manufacturing Costs
TO Cash
TO Accumulated Depreciation
43,660
14,160
18,880
62,540
14,160
2. Journal Entries for assignment
S. no
Particulars
Debit
Credit
1
Work in Progress
TO Raw Materials Inventory
(11,800 + 46,020 + 35,400)
93,220
93,220
2
Work in progress
TO Salaries & Wages
59,000
59,000
3
Work in progress
TO Manufacturing Overheads
76,700
76,700
3. Journal Entry for completed job sheets
Job 50 & 51 are completed during the month. Therefore the costs of 50 & 51 will be journalized.
S. no
Particulars
Debit
Credit
1
Finished Goods Inventory
TO Work in progress
(81,420 + 110,920)
192,340
192,340
4. Journal entry for sale of job sheet
S. no
Particulars
Debit
Credit
1
Accounts Receivable
TO Sale of job 49
143,960
143,960
2
Accounts Receivable
TO Sale of job 50
186,440
186,440
S. no
Particulars
Debit
Credit
1
Raw Materials Inventory
TO Accounts Payable
(Being inventory purchased)
106,200
106,200
2
Salaries & Wages Expense
To Labor Payable
TO Payroll Taxes Payable
82,600
63,720
18,880
3
Manufacturing Overheads (20,060+23,600)
Depreciation Expense
Other Manufacturing Costs
TO Cash
TO Accumulated Depreciation
43,660
14,160
18,880
62,540
14,160
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