Sinatra Industries Inc. uses a job order cost system . The following data summar
ID: 2378574 • Letter: S
Question
Sinatra Industries Inc. uses a job order cost system. The following data summarize the operations related to production for January 2014, the first month of operations:
Required:
1. Journalize the entries to record the summarized operations. For a compound transaction, if an amount box does not require an entry, leave it blank or enter "0".
2. Post the appropriate entries to T accounts for Work in Process and Finished Goods, using the identifying letters as transaction codes. Insert memo account balances as of the end of the month.
3. Prepare a schedule of unfinished jobs to support the balance in the work in process account.
4. Prepare a schedule of completed jobs on hand to support the balance in the finished goods account.
Entries Description Debit Credit a.materials accounts payableb.work in process
factory overhead
materials wages payable
c.factory overhead
accounts payable
d.factory overhead
accumulated depreciation-machinery and equiptment
e.work in process
factory overhead
f.finished goods
work in process
g. Sale; accounts recievable
sales
g. Cost of goods sold
finished goods
Sinatra Industries Inc. uses a job order cost system. The following data summarize the operations related to production for January 2014, the first month of operations: Materials purchased on account, $39,300. Materials requisitioned and factory labor used: Factory overhead costs incurred on account, $7,500. Depreciation of machinery and equipment, $2,640. The factory overhead rate is $60 per machine hour. Machine hours used: Jobs completed: 201, 202, 203 and 205. Jobs were shipped and customers were billed as follows: Job 201, $11,000; Job 202, $14,820; Job 203, $19,920. Journalize the entries to record the summarized operations. For a compound transaction, if an amount box does not require an entry, leave it blank or enter "0". Post the appropriate entries to T accounts for Work in Process and Finished Goods, using the identifying letters as transaction codes. Insert memo account balances as of the end of the month. Prepare a schedule of unfinished jobs to support the balance in the work in process account. Prepare a schedule of completed jobs on hand to support the balance in the finished goods account.
Explanation / Answer
1. JOURNAL Description Debit Credit a. Materials 39,300 Accounts Payable 39,300 b. Work in Process 66,380 Factory Overhead 6,940 Wages Payable 37,300 Materials 36,020 c. Factory Overhead 7,500 Accounts Payable 7,500 d. Factory Overhead 2,640 Accum. Depr. - Machinery and Equipment 2,640 e. Work in Process 17,280 Factory Overhead 17,280 f. Finished Goods 46,640 Work in Process 46,640 Computation of cost of jobs finished: Direct Factory Job Materials Direct Labor Overhead Total No. 201 $ 3,950 $ 3,700 $ 1,860 $ 9,510 No. 202 4,830 5,000 2,760 12,590 No. 203 3,200 2,500 2,160 7,860 No. 205 6,800 7,000 2,880 16,680 Total $ 46,640 g. Accounts Receivable 45,740 Sales 45,740 Cost of Goods Sold 29,960 Finished Goods 29,960 Computation of cost of jobs sold: Job Total No. 201 $ 9,510 No. 202 12,590 No. 203 7,860 Total $ 29,960