DiSalvio Co. uses a job order cost system. The following data summarize the oper
ID: 2469316 • Letter: D
Question
DiSalvio Co. uses a job order cost system. The following data summarize the operations related to production for May:
May
1
Materials purchased on account, $634,000.
2
Materials requisitioned, $646,200, of which $74,500 was for general factory use.
31
Factory labor used, $660,200, of which $91,200 was indirect.
31
Other costs incurred on account for factory overhead, $147,500; selling expenses, $234,000; and administrative expenses, $146,400.
31
Prepaid expenses expired for factory overhead were $29,200; for selling expenses, $26,800; and for administrative expenses, $18,000.
31
Depreciation of office building was $84,600; of office equipment, $43,340; and of factory equipment, $32,000.
31
Factory overhead costs applied to jobs, $362,000.
31
Jobs completed, $1,002,000.
31
Cost of goods sold, $890,000.
Journalize the entries to record the summarized operations. Refer to the Chart of Accounts for exact wording of account titles.
CHART OF ACCOUNTS
DiSalvio Co.
General Ledger
ASSETS
110
Cash
121
Accounts Receivable
125
Notes Receivable
126
Interest Receivable
131
Materials
132
Work in Process
133
Factory Overhead
134
Finished Goods
141
Supplies
142
Prepaid Insurance
143
Prepaid Expenses
181
Office Building
191
Office Equipment
192
Accumulated Depreciation-Buildings and Equipment
LIABILITIES
210
Accounts Payable
221
Utilities Payable
231
Notes Payable
236
Interest Payable
241
Lease Payable
251
Wages Payable
252
Consultant Fees Payable
EQUITY
311
Common Stock
340
Retained Earnings
351
Dividends
390
Income Summary
REVENUE
410
Sales
610
Interest Revenue
EXPENSES
510
Cost of Goods Sold
520
Wages Expense
531
Selling Expenses
532
Insurance Expense
533
Utilities Expense
534
Office Supplies Expense
540
Administrative Expenses
561
Depreciation Expense-Office Building
562
Depreciation Expense-Office Equipment
590
Miscellaneous Expense
710
Interest Expense
May
1
Materials purchased on account, $634,000.
2
Materials requisitioned, $646,200, of which $74,500 was for general factory use.
31
Factory labor used, $660,200, of which $91,200 was indirect.
31
Other costs incurred on account for factory overhead, $147,500; selling expenses, $234,000; and administrative expenses, $146,400.
31
Prepaid expenses expired for factory overhead were $29,200; for selling expenses, $26,800; and for administrative expenses, $18,000.
31
Depreciation of office building was $84,600; of office equipment, $43,340; and of factory equipment, $32,000.
31
Factory overhead costs applied to jobs, $362,000.
31
Jobs completed, $1,002,000.
31
Cost of goods sold, $890,000.
Explanation / Answer
Debit Meterials 6,34,000 Credit Accounts Payable 6,34,000 Debit Work in process 5,71,700 Debit Factory overhead 74,500 Credit meterial 6,46,200 Debit work in progress 5,69,000 Debit Factory overhead 91,200 Credit wages payable 6,60,200 Debit Factory overhead 1,47,500 Debit Selling Expenses 2,34,000 Debit Administrative Expenses 1,46,400 Credit Accounts Payable 5,27,900 Debit Factory overhead 29,200 Debit Selling Expenses 26,800 Debit Administrative Expenses 18,000 Credit Prepaid Expenses 74,000 Debit Depreciation expense - office building 84,600 Debit Depreciation expense - office Equipment 43,340 Debit Factory overhead 32,000 Credit Accumulated depreciation - Building and equipment 1,59,940 Debit Work in progress 3,62,000 Credit Factory overhead 3,62,000 Debit Finished goods 10,02,000 Credit work in progress 10,02,000 Debit cost of goods sold 8,90,000 Credit finished goods 8,90,000