EXERCISE $3-5$ Journal Entries and T$-$accounts LO$3-1,$ LO$3-2$

The Polaris Company uses a job$-$order costing system. The following transactions occurred in October:

a$.$ Raw materials purchased on account, $$210,000.$

b$.$ Raw materials used in production, $$190,000($ $$178,000$ direct materials and $$12,000$ indirect

materials$).$

c$.$ Accrued direct labor cost of $$90,000$ and indirect labor cost of $$110,000.$

d$.$ Depreciation recorded on factory equipment, $$40,000.$

e$.$ Other manufacturing overhead costs accrued during October, $$70,000.$

f$.$ The company applies manufacturing overhead cost to production using a predetermined rate of

$$8$ per machine$-$hour. A total of $30,000$ machine$-$hours were used in October.

g$.$ Jobs costing $$520,000$ according to their job cost sheets were completed during October and

transferred to Finished Goods.

h$.$ Jobs that had cost $$480,000$ to complete according to their job cost sheets were shipped to customers

during the month. These jobs were sold on account at $25\%$ above cost.

Required:

Prepare journal entries to record the transactions given above.

Prepare T$-$accounts for Manufacturing Overhead and Work in Process. Post the relevant transactions

from above to each account. Compute the ending balance in each account, assuming that Work in

Process has a beginning balance of $$42,000.$