Journal Entries, T-Accounts, Cost of Goods Manufactured andSold

During May, the following transactions were completed andreported by Jerico Company:

1. Materials purchased on account, $60,100.
2. Materials issued to production to fill job-order requisitions:direct materials, $50,000; indirect materials, $8,800.
3. Payroll for the month: direct labor, $75,000; indirect labor,$36,000; administrative, $28,000; sales, $19,000.
4. Depreciation on factory plant and equipment, $10,400.
5. Property taxes on the factory accrued during the month,$1,450.
6. Insurance on the factory expired with a credit to the prepaidinsurance account, $6,200.
7. Factory utilities, $5,500.
8. Advertising paid with cash, $7,900.
9. Depreciation on office equipment, $800; on sales vehicles,$1,650.
10. Legal fees incurred but not yet paid for preparation of leaseagreements, $750.
11. Overhead is charged to production at a rate of $18 per directlabor hour. Records show 4,000 direct labor hours were workedduring the month.
12. Cost of jobs completed during the month, $160,000.

The company also reported the following beginning balances inits inventory accounts:

Materials Inventory	$7,500
Work-in-Process Inventory	37,000
Finished Goods Inventory	50,000

Required:

1. Prepare journal entries to record thetransactions occurring in May. For a compound transaction, if anamount box does not require an entry, leave it blank.

a.
b.
c.
d.
e.
f.
g.
h.
i.
j.
k.
l.

2. Prepare T-accounts for Materials Inventory,Overhead Control, Work-in-Process Inventory, and Finished GoodsInventory. Post the entries to the T-account in the same order inwhich they were journalized.

Materials Inventory
Balance

Work in Process Inventory
Balance

Finished Goods Inventory
Balance

Overhead Control
		Balance

3. Prepare a statement of cost of goodsmanufactured.

Jerico Company
Statement of Cost of Goods Manufactured
For the Month Ended May 31, 20XX
		$
Overhead:
	$
	$
Manufacturing costs added		$
Cost of goods manufactured		$

4. If the overhead variance is all allocated tocost of goods sold, by how much will cost of goods sold decrease orincrease?
    by   $