Answer:
Sangvikar Company
a. Journal Entries for The April transactions:
Debit Raw materials $30,000
Credit Accounts Payable $30,000
To record the purchase of raw materials.
Debit WIP:
Job 114, $16,500
Job 115, $12,000
Job 116, $5,000
Credit Raw materials $33,500
To record the transfer of raw materials to production.
Debit WIP:
Job 114 $2,100
Job 115 $3,950
Job 116 $1,440
Credit Direct labor costs $7,490
To record the direct labor costs to WIP.
Debit WIP:
Job 114 $1,348
Job 115 $2,535
Job 116 $934
Credit Overhead $4,807
To record the overhead applied to WIP.
Debit Finished Goods Inventory $23,699
Credit WIP: Job 115 $23,699
To record the transfer of Job 115 to Finished Goods.
Debit Cost of Goods Sold $23,699
Credit Finished Goods Inventory $23,699
To record the cost of goods sold.
Debit Accounts Receivable $29,624
Credit Sales Revenue $29,624
To record the sale of Job 115 on credit.
b. Ending balances of Inventory Accounts:
Raw materials = $9,230
WIP:
Job 114 = $25,329
Job 116 = $18,119
Total = $43,448
Finished Goods = $8,700
c. T-Accounts:
Materials Inventory
Account Titles Debit Credit
Beginning balance $12,730
Accounts Payable 30,000
WIP:
Job 114 $16,500
Job 115 12,000
Job 116 5,000
Balance $9,230
Accounts Payable
Account Titles Debit Credit
Raw materials $30,000
Work-in-Process Inventory - Job 114
Account Titles Debit Credit
Beginning balance $5,381
Raw materials 16,500
Direct labor cost 2,100
Overhead applied 1,348
Balance $25,329
Work-in-Process Inventory - Job 115
Account Titles Debit Credit
Beginning balance $5,214
Raw materials 12,000
Direct labor cost 3,950
Overhead applied 2,535
Finished Goods Inventory $23,699
Work-in-Process Inventory - Job 116
Account Titles Debit Credit
Beginning balance $10,745
Raw materials 5,000
Direct labor cost 1,440
Overhead applied 934
Balance $18,119
Direct Labor Cost
Account Titles Debit Credit
WIP:
Job 114 $2,100
Job 115 3,950
Job 116 1,440
Overhead
Account Titles Debit Credit
WIP:
Job 114 $1,348
Job 115 2,535
Job 116 934
Finished Goods Inventory
Account Titles Debit Credit
Beginning balance $8,700
WiP: Job 115 $23,699
Cost of Goods Sold $23,699
Cost of Goods Sold
Account Titles Debit Credit
Finished Goods $23,699
Sales Revenue
Account Titles Debit Credit
Accounts Receivable $29,624
Accounts Receivable
Account Titles Debit Credit
Sales Revenue $29,624
Step-by-step explanation:
a) Data and Calculations:
Beginning balances:
Materials Inventory $12,730
Work-in-Process Inventory 21,340
Finished Goods Inventory 8,700
Work-in-Process Inventory costs:
Job 114 Job 115 Job 116
Direct materials $2,411 $2,640 $3,650
Direct labor 1,800 1,560 4,300
Applied overhead 1,170 1,014 2,795
Total $5,381 $5,214 $10,745
Analysis of April Transactions:
Raw materials $30,000 Accounts Payable $30,000
WIP: Job 114, $16,500; Job 115, $12,000; and Job 116, $5,000 and Raw materials $33,500
WIP: Job 114 $2,100 Job 115 $3,950, Job 116 $1,440 Direct labor costs $7,490
WIP: Job 114 $1,348 Job 115 $2,535 Job 116 $934 Overhead $4,807
Job tickets were collected and summarized (Direct labor costs):
Jobs DLH DLH Costs Overhead applied
Job 114, 150 hours at $14/hour = $2,100 $1,348 ($2,100/$7,490 *$4,807)
Job 115, 220 hours at $18/hour = $3,950 2,535 ($3,950/$7,490 *$4,807)
Job 116, 80 hours at $18/hour = $1,440 924 ($1,440/$7,490 *$4,807)
Total = 450 hours $7,490 $4,807
Actual Overhead = $4,807
Total direct labor costs = $7,490
Overhead rate = $0.64
Sales Revenue = $29,624 ($23,699 * 125%)