Prepare Journal entries for each transaction. Nottaway Flooring produces custom-
ID: 2599761 • Letter: P
Question
Prepare Journal entries for each transaction.
Nottaway Flooring produces custom-made floor tiles. The company’s Raw Material Inventory account contains both direct and indirect materials. Until the end of April 2013, the company worked solely on a large job (#4263) for a major client. Near the end of the month, Nottaway began Job #4264. The following information was obtained relating to April production operations.
Beginning balances of Raw Material Inventory and Work In Process Inventory were, respectively, $4,300 and $11,400.
Of the beginning WIP balance, $800 was related to Job #4263.
Job #4263 was completed during April. 2.
PROBLEM: complete journal entry for: Direct material issued to Job #4263 cost $163,800; indirect material issued for that job cost $12,460. Direct material costing $1,870 was issued to start production of Job #4264. Please provide journal entries- please show how you came up with the answer
My answer so far (divided in sections)
WIP debit 168,000/ direct materials credit 168,000
WIP debit 12,460/ indirect materials credit 12,460
WIP debit 1870/ direct materials credit 1870
My question: How was the 168,000 calculated?
Explanation / Answer
If 168000 is your answer, its incorrect. It has to be 163800. However, if someone or you found it that your homework software is only accepting the answer 168000, question might have some error which needs to be fixed with regard to accuracy in figures. Also language of the question is itself misguiding regarding WIP balance of Job#4263 which says that only 800 belonging to this particular job but in the begining of the problem it is said that only job on hand was #4263. So entire beginning balance of WIP of 11400 should be belong to Job #4263 and not just 800. If you have posted the part of question, please post the complete question. So better idea can be derived out of it. Or you can analyse the question based on my above notes. Its not possible to get the 168000 from the figures given in the above question.
Thank you