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

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Accounting

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

  1. Raw materials purchased on account, $210,000.
  2. Raw materials used in production, $190,000 ($152,000direct materials and $38,000 indirect materials).
  3. Accrued direct labor cost of $49,000 and indirectlabor cost of $21,000.
  4. Depreciation recorded on factory equipment,$105,000.
  5. Other manufacturing overhead costs accrued duringOctober, $131,000.
  6. The company applies manufacturing overhead cost toproduction using a predetermined rate of $5 per machine-hour. Atotal of 76,200 machine-hours were used in October.
  7. Jobs costing $512,000 according to their job costsheets were completed during October and transferred to FinishedGoods.
  8. Jobs that had cost $452,000 to complete according totheir 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 givenabove.

2. Prepare T-accounts for Manufacturing Overhead and Work inProcess. Post the relevant transactions from above to each account.Compute the ending balance in each account, assuming that Work inProcess has a beginning balance of $34,000.

Answer & Explanation Solved by verified expert
3.8 Ratings (577 Votes)

Ques 1

Date General Journal Debit Credit
a Raw Materials inventory 210000
   Accounts payable 210000
b Work In process inventory 152000
Manufacturing overhead 38000
   Raw Materials inventory 190000
c Work in process 49000
Manufacturing overhead 21000
   Salaries & wages payable 70000
d Manufacturing overhead 105000
   Accumulated depreciation 105000
e Manufacturing overhead 131000
   Accounts payable 131000
f Work In process 381000
   Manufacturing overhead 381000
(76200)*$5.00
g Finished goods inventory 512000
   Work In process 512000
h Accounts receivable 551440
   sales 551440
(452000*122%)
Cost of goods sold 452000
finished goods inventory 452000

Ques 2

Manufacturing overhead
b 38000 f 381000
c 21000
d 105000
e 131000
end bal 86000
Work in process
Beginning balance 34000 g 512000
b 152000
c 49000
f 381000
end bal 104000

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