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Accounting

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Bergo Bay's accounting system generated the following account balances on December 31. The companys manager knows something is wrong with this list of balances because it does not show any balance for Work in Process Inventory, and the accrued factory payroll (Factory Wages Payable) has not been recorded.

Debit Credit
Cash $ 76,000
Accounts receivable 45,000
Raw materials inventory 27,500
Work in process inventory 0
Finished goods inventory 12,000
Prepaid rent 4,000
Accounts payable $ 10,500
Notes payable 13,500
Common stock 40,000
Retained earnings (prior year) 79,000
Sales 188,500
Cost of goods sold 103,000
Factory overhead 26,000
General and administrative expenses 38,000
Totals $ 331,500 $ 331,500

These six documents must be processed to bring the accounting records up to date.

Materials requisition 10: $ 4,700 direct materials to Job 402
Materials requisition 11: $ 7,700 direct materials to Job 404
Materials requisition 12: $ 2,200 indirect materials
Labor time ticket 52: $ 7,000 direct labor to Job 402
Labor time ticket 53: $ 13,000 direct labor to Job 404
Labor time ticket 54: $ 5,000 indirect labor

Jobs 402 and 404 are the only jobs in process at year-end. The predetermined overhead rate is 150% of direct labor cost.

  1. Direct materials.
  2. Direct labor.
  3. Overhead applied.
  4. Indirect materials.
  5. Indirect labor.

Required:

1. Use the document information above to prepare journal entries for the above costs.

Complete this question by entering your answers in the tabs below.

  • Req 2A
  • Req 2B

In Factory Overhead T-account, enter amounts from part 1 related to factory overhead. Determine the amount of over- or underapplied overhead.

Factory Overhead
Actual overhead (given)
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