Reference no: EM132695616
Question - Prepare entries in a job order cost system and partial income statement. (LO 1, 2, 3, 4, 5), AP For the year ended December 31, 2020, the job cost sheets of Cinta Company contained the following data.
|
Job Number
|
Explanation
|
Direct Materials
|
Direct Labor
|
Manufacturing Overhead
|
Total Cost
|
|
7640
|
Balance 1/1
|
25,000
|
24,000
|
28,800
|
77,800
|
|
|
Current year's costs
|
30,000
|
36,000
|
43,200
|
109,200
|
|
7641
|
Balance 1/1
|
11,000
|
18,000
|
21,600
|
50,600
|
|
7642
|
Current year's costs
|
58,000
|
55,000
|
66,000
|
179,000
|
Other data -
1. Raw materials inventory totalled 15,000 on January 1. During the year, 140,000 of raw materials were purchased on account.
2. Finished goods on January 1 consisted of Job No. 7638 for 87,000 and Job No. 7639 for 92,000.
3. Job No. 7640 and Job No. 7641 were completed during the year.
4. Job Nos. 7638, 7639, and 7641 were sold on account for 530,000.
5. Manufacturing overhead incurred on account totalled 120,000.
6. Other manufacturing overhead consisted of indirect materials 14,000, indirect labor 18,000, and depreciation on factory machinery 8,000.
Instructions -
a. Prove the agreement of Work in Process Inventory with job cost sheets pertaining to unfinished work. (Hint: Use a single T-account for Work in Process Inventory.) Calculate each of the following, then post each to the T-account: (1) beginning balance, (2) direct materials, (3) direct labor, (4) manufacturing overhead, and (5) completed jobs.
b. Prepare the adjusting entry for manufacturing overhead, assuming the balance is allocated entirely to Cost of Goods Sold.
c. Determine the gross profit to be reported for 2020.