Question

Barnes Company uses a job order cost system. Barnes Company uses a job order cost system. The following data summarize the operations related to production for October:

October1 Materials purchased on account, $315,500.
2 Materials requisitioned, $290,100, of which $8,150 was for general factory use.
31 Factory labor used, $489,500, of which $34,200 was indirect.
31 Other costs incurred on account for factory overhead, $600,000; selling expenses, $150,000; and administrative expenses, $100,000.
31 Prepaid expenses expired for factory overhead were $18,000; for selling expenses, $6,000; and for administrative expenses, $5,000.
31 Depreciation of office building was $30,000; of office equipment, $7,500; and of factory equipment, $60,000.
31 Factory overhead costs applied to jobs, $711,600.
31 Jobs completed, $1,425,000.
31 Cost of goods sold, $1,380,000.
Required:
Journalize the entries to record the summarized operations.

Answer 1

October 1

Raw Materials $315,500 (debit)

Accounts Payable $315,500 (credit)

October 2

Work In Process : Direct Materials $281,950 (debit)

Work In Process : Indirect Materials $8,150 (debit)

Raw Materials $290,100 (credit)

October 31

Work In Process : Direct Labor $34,200 (debit)

Work In Process : Indirect Labor $455,300 (debit)

Salaries and Wages Payable $489,500 (credit)

October 31

Factory Overheads $600,000 (debit)

Selling Expenses $150,000(debit)

Accounts Payable $750,000 (credit)

October 31

Factory Overheads $18,000 (debit)

Selling Expenses $6,000 (debit)

Administrative Expenses $5,000 (credit)

Prepaid Factory Overheads $18,000 (debit)

Prepaid Selling Expenses $6,000 (debit)

Prepaid Administrative Expenses $5,000 (credit)

October 31

Work In Process - Depreciation ; factory equipment $60,000 (debit)

Depreciation ; office equipment $7,500 (debit)

Depreciation ; office building $30,000 (debit)

Accumulated Depreciation ; Equipment $67,500 (credit)

Accumulated Depreciation : Buildings $30,000 (credit)

October 31

Work In Process $711,600 (debit)

Factory Overhead $711,600 (credit)

October 31

Finished Goods Inventory $1,425,000 (debit)

Work In Process Inventory $1,425,000 (credit)

October 31

Cost of goods sold $1,380,000 (debit)

Finished Goods Inventory $1,380,000 (credit)

Step-by-step explanation:

Manufacturing Costs Accumulate in the Work In process Account.

Finished Goods are transferred from Work In Process Accounts to Finished Goods Inventory.

Goods sold are transferred from Finished Goods Inventory to the Trading Account as Cost of Sales.