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

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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, $211,000. Raw materials used in production, $188,000 ($150,400 direct materials and $37,600 indirect materials). Accrued direct labor cost of $48,000 and indirect labor cost of $21,000. Depreciation recorded on factory equipment, $105,000. Other manufacturing overhead costs accrued during October, $129,000. The company applies manufacturing overhead cost to production using a predetermined rate of $8 per machine-hour. A total of 76,000 machine-hours were used in October. Jobs costing $515,000 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 28% 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 $36,000.

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