Reference no: EM132611480

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

a. Raw materials purchased on account, $209,000.

b. Raw materials used in production, $192,000 ($153,600 direct materials and $38,400 indirect materials).

c. Accrued direct labor cost of $48,000 and indirect labor cost of $22,000.

d. Depreciation recorded on factory equipment, $104,000.

e. Other manufacturing overhead costs accrued during October, $129,000.

f. The company applies manufacturing overhead cost to production using a predetermined rate of $9 per machine-hour. A total of 76,200 machine-hours were used in October.

g. Jobs costing $514,000 according to their job cost sheets were completed during October and transferred to Finished Goods.

h. Jobs that had cost $451,000 to complete according to their job cost sheets were shipped to customers during the month. These jobs were sold on account at 26% above cost.

Required:

Question 1. Prepare journal entries to record the transactions given above.

Question 2. Prepare T-accounts for Manufacturing Overhead and Work in Process. Post the relevant transactions from above to each account. Compute the ending balance in each account, assuming that Work in Process has a beginning balance of $37,000.