Question

Journal Entries, T-Accounts, Cost of Goods Manufactured and Sold During May, the following transactions were completed and reported by Jerico Company: Materials purchased on account, $60,100. Materials issued to production to fill job-order requisitions: direct materials, $50,000; indirect materials, $8,800. Payroll for the month: direct labor, $75,000; indirect labor, $36,000; administrative, $28,000; sales, $19,000. Depreciation on factory plant and equipment, $10,400. Property taxes on the factory accrued during the month, $1,450. Insurance on the factory expired with a credit to the prepaid insurance account, $6,200. Factory utilities, $5,500. Advertising paid with cash, $7,900. Depreciation on office equipment, $800; on sales vehicles, $1,650. Legal fees incurred but not yet paid for preparation of lease agreements, $750. Overhead is charged to production at a rate of $18 per direct labor hour. Records show 4,000 direct labor hours were worked during the month. Cost of jobs completed during the month, $160,000. The company also reported the following beginning balances in its inventory accounts: Materials Inventory $7,500 Work-in-Process Inventory 37,000 Finished Goods Inventory 50,000 Required:

1. Prepare journal entries to record the transactions occurring in May. For a compound transaction, if an amount box does not require an entry, leave it blank. a. b. c. d. e. f. g. h. i. j. k. l.

2. Prepare T-accounts for Materials Inventory, Overhead Control, Work-in-Process Inventory, and Finished Goods Inventory. Post the entries to the T-account in the same order in which they were journalized. Materials Inventory Balance Work in Process Inventory Balance Finished Goods Inventory Balance Overhead Control Balance

3. Prepare a statement of cost of goods manufactured. Jerico Company Statement of Cost of Goods Manufactured For the Month Ended May 31, 20XX $ Overhead: $ $ Manufacturing costs added $ Cost of goods manufactured $

4. If the overhead variance is all allocated to cost of goods sold, by how much will cost of goods sold decrease or increase? by $

Answer 1

1. Dr Raw material 60100

Cr Account payable 60100 (Material purchased on account)

2. Dr work in process 50000

Cr Raw material 50000 (Direct material used)

3. Dr Over head 8800

Cr Raw material 8800 (indirect material used)

4. Dr work in process 75000

Cr Factory payroll 75000 (Direct labor used)

5. Dr. Overhead 36000

Cr factory payroll 36000 (Indirect labor used)

6. Dr Administrative expense 28000

Cr Account Payable 28000

7. Dr Account receivable 19000

Cr sales 19000

8. Dr Overhead 10400

Cr accumulated depreciation-factory plant and equipment 10400

9. Dr Overhead 1450

Property tax payable 1450( Property tax was payable)

10. Dr Overhead 6200

Cr prepaid insurance 6200 (Insurance expires)

11. Dr Overhead 7900

Cr Cash 7900 (Advertising made on cash)

12. Dr Overhead 800

Cr Accumulated depreciation-office equipment 800

(Depreciation of office equipment)

13. Dr Sales vehicles 1650

Cr Cash 1650 (purchase sales vehicle)

14. Dr Overhead 750

Cr Account payable 750 (legal fee incurred but not payable)

15. Dr work in process 72000

Cr Applied overhead 72000

( to record applied overhead= 18 * 4000 direct labor = 72000)

16. Dr finished goods 160000

Cr work in process 160000 ( to record cost of jobs completed)

Step-by-step explanation:

Material Work in process Factory payroll

_Dr______Cr___ ___Dr______Cr_____ _Dr______Cr___

60100= 50000 50000= =75000

=8800 75000 =36000

Account Payable Overhead Cost of goods Manufactured

_Dr_____Cr___ _Dr______Cr___ _Dr______Cr___

=60100 8800 =

=28000 36000=

10400=

1450=

6200=

Cost of goods sold Finished goods Account receivable

_Dr______Cr___ _Dr______Cr___ _Dr______Cr___

19000=

Sales Accumulated deprecition-plant

_Dr______Cr___ _Dr______Cr___

=19000 =10400

Administrative Propert tax payable Prepaid insurance

Expense

_Dr______Cr___ _Dr______Cr___ _Dr______Cr___

28000= =1450 =6200

Answer 2

please the answer below

Step-by-step explanation:

1. Prepare journal entries: ($)

Dr Cr

Materials inventory 60, 100

Accounts Payable 60, 100

Work-In-Process inventory 50, 000

Overhead control 8, 800

Materials inventory 58, 800

Work-In-Process inventory 75, 000

Overhead control 36, 000

Administrative expenses 28, 000

Selling expenses 19, 000

Salaries and wages 158, 000

Overhead control 10, 400

Accumulated Depreciation 10, 400

Overhead control 1, 450

Property tax payable 1, 450

Overhead control 6, 200

Property tax payable 6, 200

Overhead control 5, 500

Utility expense 5, 500

Selling expenses 7, 900

Bank 7, 900

Administrative expenses 800

Selling expenses 1, 650

Accounts payable 2, 450

Administrative expenses 750

Legal fees 750

Work-In-Process inventory 72, 000

Overhead control 72, 000

Finished goods 160, 000

Work-In-Process inventory 160, 000

2. Prepare T-Accounts:

Materials Inventory

75, 000 58, 800

60, 000

8, 800

Work-In-Process inventory

37, 000 160, 000

50, 000

75, 000

72, 000

74, 000

Finished Good

50, 000

160, 000

210, 000

Overhead Control

8, 800 72, 000

36, 000

10, 400

1, 450

6, 200

5, 500

3. Prepare the statement of cost of goods sold

Direct material 50, 000

Direct labor 75, 000

Overhead expenses 72, 000

Total cost of manufacturing 197, 000

Add: Work-In-Process (beginning) 37, 000

Less: Work-In-Process (end) (74, 000)

Total cost of goods sold 160, 000

4. How much will the cost of goods sold change:

(a) Calculate the variance:

= 72, 000 – (8, 800 + 36, 000 + 10, 400 + 1, 450 + 6, 200 + 5, 500)

= 3, 650

Cost of goods sold, considering the variance in Work-In-Process:

Direct material 50, 000

Direct labor 75, 000

Overhead expenses 68, 350 (72, 000 – 3, 650)

Total cost of manufacturing 193, 350

Add: Work-In-Process (beginning) 37, 000

Less: Work-In-Process (end) (74, 000)

Total cost of goods sold 156, 350

The cost of goods sold decreased by $3, 650