1.
Acc #
75,180
75,180 «- Correct!
2.
Acc #
2,100
2,100 «- Correct!
3.
Acc #
75,180
75,180 «- Correct!
4.
Acc #
35,700
35,700 «- Correct!
5.
Acc #
58,800 «- Correct!
39,900
6.
Acc #
29,400
29,400 «- Correct!
7.
Acc #
52,920
88,200 «- Correct!
8.
Cash
Recognized $29,400 in fringe benefit costs, incurred as a result of the wages paid in (5).
information about payroll.
remaining 28,500 was paid to the employees. See transactions (6) and (7) for additional
This $29,400 was debited to Payroll and credited to Fringe Benefits Payable.
amount, $13,500 was withheld for payroll taxes and credited to payroll taxes payable. The
Incurred wage costs of $42,000, which were debited to payroll, a temporary account. Of this
Payroll Taxes Payable
Administrative and Marketing Costs
Manufacturing Overhead
Fringe Benefits Payable
Analyzed the Payroll account and determined that 60 percent represented direct labor;
For this entry you will need to compute the amounts debited and credited.
30 percent, indirect manufacturing labor, and 10 percent, administrative and marketing costs.
manufacturing plant totaling $45,360.
Paid for utilities, power, equipment maintenance, and other miscellaneous items for the
Materials Inventory
Work-In-Process–Direct Materials
Cash
Accounts Payable
Problem 07-58
Requirement a:
Issued $35,700 in direct materials to the production department.
Paid for the materials purchased in (1)
Issued $2,100 in supplies from the materials inventory to the production department.
Purchased $75,180 in materials on account.
APEX MANUFACTURING
Materials Inventory
Materials Inventory
Manufacturing Overhead
Accounts Payable
Acc #
45,360
45,360 «- Correct!
9.
Acc #
92,610
92,610 «- Correct!
Acc #
24,150
24,150 «- Correct!
Accumulated Depreciation-Property, Plant, and Equipment
Manufacturing Overhead Control
Recognized depreciation of $24,150 on manufacturing property, plant, and equipment.
Applied Manufacturing Overhead
Work-In-Process–Overhead
Cash
Manufacturing Overhead
For this entry you will need to compute the amounts debited and credited.
Applied overhead on the basis of 175 percent of direct labor costs.
1. 75,180$
2. 2,100$
3.
4. 35,700$
5.
39,900$
18,900$
6. 29,400$
7.
Percentage represented by indirect manufacturing labor.
Percentage represented by administrative and marketing.
Paid for utilities, power, equipment maintenance, and other misc. items
for manufacturing plant.
Recognized depreciation on manufacturing property, plant, and equipment.
Percent of overhead applied based on direct labor costs.
Percentage represented by direct labor.
Beginning Ending
Cost of Goods Sold
January transactions:
Given Data P07-58:
Account Balances:
APEX MANUFACTURING
(a)
Beginning balance
Transferred out (d)
(b) Direct materials Disaster loss (f)
(c) Direct labor
(e) Overhead applied
Ending balance
Correct! 172,400 107,000 Correct!
Correct! 140,628 408,028 Correct!
Correct! 135,400
Correct! 66,600
–
Step b.
98,000$
132,800
230,800
86,000$
4,172 90,172
140,628$
Correct!
132,800$
Step c.
135,400$
Ending balance in Accounts Payable
Cash payment during May
subtotal
less beginning balance
Computation of Direct Labor
Payroll
Direct Labor
Correct!
less: Ending Inventory
Indirect materials
Direct materials used
Compute direct materials added to production in the space below.
Beginning materials inventory
Purchases
subtotal
those parts are identified with
TOLEDO FARM IMPLEMENTS
Work-in-Process
Work-in-Process
Problem 07-61
This problem is arranged so that
it can be solved one step at a
time. The T account for Work-
in-Process to the right shows
you what information you need
to solve the problem. Some of
the information is given in the
problem. Most of the information
you will need to compute, and
will be identified as correct or incorrect.
computations for the missing data. Only the final items in the Work-in-Process T account above
This is a challenging problem. To keep it challenging you will need to set up your own
the letters a thru e. After you
have successfully computed
each item, put your answers
in the second Work-in-Process
T Account to find out if you are correct.
materials purchased. Compute purchases in the shaded area below.
To compute the direct materials added to work-in-process, you will first have to compute
Step d.
75,000$
Balance at the end of May 793,200$
Balance at the beginning of May 697,200 96,000
171,000
64,000
107,000$
Correct!
Step e.
434,000$
369,800
64,200
2,400
66,600$
Correct!
Step f.
408,028$
Less goods transferred out
Total loss from the Tornado
Debits to the Work-in-Process account:
Materials added
Total debits
Correct!
Add overapplied overhead
Overhead applied during May
Computation of the loss from the Tornado
Computation of Overapplied Applied during May
Computation of amount transferred out of Work-in-Process.
Ending balance of Finished Goods
Plus Cost of Goods Sold during May:
subtotal
Less Beginning balance of Finished Goods
Amount transferred to Finished Goods from Work-in-Process
Ending balance in Manufacturing Overhead
Less beginning balance in Manufacturing Overhead
subtotal
98,000$
172,400
64,000
697,200
43,200
369,800
–
19,400
359,200
86,000$
?
75,000
Manufacturing overhead through May 31
Cost of goods sold through May 31
Manufacturing section payroll costs last month
Available balances at end of May:
Additional Information:
Finished goods inventory, April 30
Payroll payable, April 30
Manufacturing overhead through April 30
Work-in-process inventory, April 30
Given Data P07-61:
Information from April financial statements:
Materials inventory, April 30
Inventories on hand May 31:
Accounts payable ( materials suppliers), April 30
Cost of goods sold through April 30
Work-in-process inventory
Finished goods inventory
Materials inventory
Overhead applied through April 30
Withholding and other payroll liabilities, April 30
18,400$
Correct!
128,000$
Correct!
Actual Applied
80,000$ 64,000$
Correct! Correct!
8,000$ 8,000$
38,400 76,800
19,200 38,400
65,600
38,400
19,200
–$
Correct!
12,000$ 12,000$
48,000 48,000
24,000 24,000
84,000
–$
Correct!
6,400$
41,600
20,800
68,800$
Correct!
8,000$
76,800
38,400
Correct!
12,000$
48,000
24,000
84,000$
Correct!
16,000$
Work-in-Process – Job 63
Materials added in June
Labor added in June
Overhead added in June
Final Balance, June 30
Final Balance
Final Balance
Correct!
CHELSEA HOUSEHOLD RENOVATIONS
Cash or Accounts Payable
Work-in-Process – Job 61
Wages Payable
Overhead
Actual direct labor costs for June
Problem 07-64
Use the T accounts provided to determine the information needed for the management report.
Actual direct material costs for June
Work-in-Process – Job 62
Overhead costs for June
Labor added in June
Overhead added in June
Final Balance, June 30
Direct Materials
Direct Labor
Manufacturing Overhead
Totals, June 1
Materials added in June
Labor added in June
Overhead added in June
Totals, June 30
Final Balance, June 30
If you need space to make computations, the yellow area below is unprotected.
8,000$
38,400$
6,400$
41,600$
50%
80,000$
8,000$
May 31
Direct materials inventories
Finished goods inventories
June 30
Direct materials inventories
Finished goods inventories
?
?
123,200$
?
?
?
Job 62
Materials
Labor
Overhead
Total
Direct materials
Given Data P07-64:
Started and completed Job 62
Completed Job 61
Total
Started Job 63
May 31: Job 61
Direct materials
Labor (960 hours X $40)
June 30: Job 63
Actual overhead
Job 61
Labor (1040 hours X $40)
Percentage each job complete as to labor-hours
Materials
Labor
Overhead