1) brandon manufacturing is a manufacturing firm that uses job - order costing. at the beginning of january…

1) brandon manufacturing is a manufacturing firm that uses job - order costing. at the beginning of january, the companys inventory balances were as follows: raw materials: $24,200 work in process: $31,750 finished goods: $88,500 the company applies overhead to jobs using a predetermined overhead rate based on direct labour cost. at the beginning of the year, the company estimated that it incurs $253,440 in manufacturing overhead cost and spend $528,000 in direct labour. the following events took place in january: a.) raw materials purchased: $43,250. b.) raw materials requisitioned for use in production: $41,600 ($37,500 direct and $4,100 indirect). c.) the following employee costs were incurred: direct labour: $44,300 indirect labour: $4,650 administrative salaries: $12,180 d.) selling costs: $12,500 e.) factory utility costs: $857 f.) depreciation for the month: $10,600, of which $10,100 is related to factory operations and $500 is related to selling and administrative activities. g.) manufacturing overhead for january was applied to jobs. h.) cost of goods manufactured for january: $102,620. i.) sales for january: $220,720; the costs on the job cost sheets of the goods that were sold: $122,620. j.) the balance in the manufacturing overhead account for january was closed out to cost of goods sold. required: prepare the appropriate journal entry for each of the items above (a. through j.). you can assume that all transactions with employees, customers, and suppliers were conducted in cash.

1) brandon manufacturing is a manufacturing firm that uses job - order costing. at the beginning of january, the companys inventory balances were as follows: raw materials: $24,200 work in process: $31,750 finished goods: $88,500 the company applies overhead to jobs using a predetermined overhead rate based on direct labour cost. at the beginning of the year, the company estimated that it incurs $253,440 in manufacturing overhead cost and spend $528,000 in direct labour. the following events took place in january: a.) raw materials purchased: $43,250. b.) raw materials requisitioned for use in production: $41,600 ($37,500 direct and $4,100 indirect). c.) the following employee costs were incurred: direct labour: $44,300 indirect labour: $4,650 administrative salaries: $12,180 d.) selling costs: $12,500 e.) factory utility costs: $857 f.) depreciation for the month: $10,600, of which $10,100 is related to factory operations and $500 is related to selling and administrative activities. g.) manufacturing overhead for january was applied to jobs. h.) cost of goods manufactured for january: $102,620. i.) sales for january: $220,720; the costs on the job cost sheets of the goods that were sold: $122,620. j.) the balance in the manufacturing overhead account for january was closed out to cost of goods sold. required: prepare the appropriate journal entry for each of the items above (a. through j.). you can assume that all transactions with employees, customers, and suppliers were conducted in cash.

Answer

Explanation:

Step1: Record raw materials purchase

Raw materials are increased and cash is decreased. Debit: Raw Materials Inventory $43,250 Credit: Cash $43,250

Step2: Record raw materials requisition

Direct materials go to Work - in - Process, indirect materials go to Manufacturing Overhead. Debit: Work - in - Process Inventory $37,500 Debit: Manufacturing Overhead $4,100 Credit: Raw Materials Inventory $41,600

Step3: Record employee costs

Direct labour goes to Work - in - Process, indirect labour to Manufacturing Overhead, administrative salaries to Administrative Expenses. Debit: Work - in - Process Inventory $44,300 Debit: Manufacturing Overhead $4,650 Debit: Administrative Expenses $12,180 Credit: Cash $61,130

Step4: Record selling costs

Selling costs are an expense. Debit: Selling Expenses $12,500 Credit: Cash $12,500

Step5: Record factory utility costs

Factory utility costs are part of manufacturing overhead. Debit: Manufacturing Overhead $857 Credit: Cash $857

Step6: Record depreciation

Factory - related depreciation to Manufacturing Overhead, selling and administrative related to appropriate expense. Debit: Manufacturing Overhead $10,100 Debit: Depreciation Expense - Selling and Administrative $500 Credit: Accumulated Depreciation $10,600

Step7: Calculate and apply manufacturing overhead

Predetermined overhead rate = $\frac{253,440}{528,000}= 0.48$ Applied overhead = $44,300\times0.48 = 21,264$ Debit: Work - in - Process Inventory $21,264 Credit: Manufacturing Overhead $21,264

Step8: Record cost of goods manufactured

Transfer cost of goods from Work - in - Process to Finished Goods. Debit: Finished Goods Inventory $102,620 Credit: Work - in - Process Inventory $102,620

Step9: Record sales and cost of goods sold

Record revenue and cost of goods sold. Debit: Cash $220,720 Credit: Sales Revenue $220,720 Debit: Cost of Goods Sold $122,620 Credit: Finished Goods Inventory $122,620

Step10: Close manufacturing overhead account

If Manufacturing Overhead has a balance, close it to Cost of Goods Sold. First, find the balance in Manufacturing Overhead: Manufacturing Overhead debits: $4,100 + 4,650+857 + 10,100=19,707$ Manufacturing Overhead credits: $21,264$ Balance = $19,707 - 21,264=- 1,557$ (credit balance) Debit: Manufacturing Overhead $1,557 Credit: Cost of Goods Sold $1,557

Answer:

a. Debit: Raw Materials Inventory $43,250; Credit: Cash $43,250 b. Debit: Work - in - Process Inventory $37,500; Debit: Manufacturing Overhead $4,100; Credit: Raw Materials Inventory $41,600 c. Debit: Work - in - Process Inventory $44,300; Debit: Manufacturing Overhead $4,650; Debit: Administrative Expenses $12,180; Credit: Cash $61,130 d. Debit: Selling Expenses $12,500; Credit: Cash $12,500 e. Debit: Manufacturing Overhead $857; Credit: Cash $857 f. Debit: Manufacturing Overhead $10,100; Debit: Depreciation Expense - Selling and Administrative $500; Credit: Accumulated Depreciation $10,600 g. Debit: Work - in - Process Inventory $21,264; Credit: Manufacturing Overhead $21,264 h. Debit: Finished Goods Inventory $102,620; Credit: Work - in - Process Inventory $102,620 i. Debit: Cash $220,720; Credit: Sales Revenue $220,720; Debit: Cost of Goods Sold $122,620; Credit: Finished Goods Inventory $122,620 j. Debit: Manufacturing Overhead $1,557; Credit: Cost of Goods Sold $1,557