The Polaris Company uses a job-order costing system. The following transactions occurred in October:...
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Accounting
The Polaris Company uses a job-order costing system.
The following transactions occurred in October:
Raw materials purchased on account, $210,000.
Raw materials used in production, $190,000 ($152,000 direct materials and $38,000 indirect materials).
Accrued direct labor cost of $49,000 and indirect labor cost of $20,000.
Depreciation recorded on factory equipment, $104,000.
Other manufacturing overhead costs accrued during October, $130,000.
The company applies manufacturing overhead cost to production using a predetermined rate of $6 per machine-hour. A total of 76,100 machine-hours were used in October.
Jobs costing $512,000 according to their job cost sheets were completed during October and transferred to Finished Goods.
Jobs that had cost $448,000 to complete according to their job cost sheets were shipped to customers during the month. These jobs were sold on account at 22% above cost.
Required:
1. Prepare journal entries to record the transactions given above.
2. 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 $33,000.
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