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BIG PROBLEM

Jones Furniture led by their CEO, Jimmy Jones is a manufacturer of furniture. Jones Furniture is

based out of Saratoga Springs NY and uses a job order costing system.

Beginning balances at $\frac{1}{1}\frac{?}{24}$ were as follows:

Cash $$25,000$

Accounts Receivable $$60,000$

Raw materials $$70,000$

Work in process $$50,000$

Finished goods $$35,000.$

The company applies overhead using a predetermined overhead rate based on machine hours.

At the beginning of the year, they estimated $40,000$ machine hours and $30,000$ direct labor

hours and incur $$420,000$ in manufacturing overhead.

The following transactions were recorded for $2024$:

a$)$ Raw Materials purchased $$180,000.$

b$)$ Raw Materials of $$220,000$ were put to use and transferred to work in process.

$$185,000$ was for direct materials and $$35,000$ for indirect materials.

c$)$ The following employee costs were incurred during $2024$: labor in the assembly plant

$$210,000,$ factory supervisor $$40,000,$ factory security guard $$30,000,$ administrative

salaries $$90,000.$

d$)$ Advertising expense incurred $$15,000.$

e$)$ Factory utilities $$22,000,$ corporate office utilities $$12,000$

f$)$ Insurance for Factory for policy period $10/1/24$ thru $\frac{9}{30}\frac{?}{25}=$$$120,000$

g$)$ Depreciation for the year was $$250,000$ for the factory and $$60,000$ for the office.

h$)$ Manufacturing overhead was applied to jobs. Jones's actual machine hour activity for

$2024$ turned out to be $37,500$ hours. This was less than the $40,000$ as predicted in the

beginning of the year.

i$)$ Goods completed and transferred to finished goods were $$700,000.$

j$)$ Chairs were sold for $$820,000$ that per the job costs sheets cost $$630,000.$

k$)$ Close out misapplied overhead $($if any$)$ as applicable to COGS

I$)$ Jones collected all of its accounts receivable.

m$)$ Jones paid off all salaries payable and accounts payable

Required:

Prepare appropriate journal entries for a thru m above; assume transactions a thru m

are recorded on account.

Post activity to T accounts. $($They apply overhead to jobs based on actual machine

hours$)$

Prepare income statement in good form for year ended $\frac{12}{31}\frac{?}{24}.$

How much cash do they have at $\frac{12}{31}\frac{?}{24}?$

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