Horngren's Cost Accounting: A Managerial Emphasis (16th Edition)
16th Edition
ISBN: 9780134475585
Author: Srikant M. Datar, Madhav V. Rajan
Publisher: PEARSON
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Textbook Question
Chapter 4, Problem 4.30E
Journal entries, T-accounts, and source documents. Visual Company produces gadgets for the coveted small appliance market. The following data reflect activity for the year 2017:
Costs incurred: | |
Purchases of direct materials (net) on credit | $121,000 |
Direct |
87,000 |
Indirect labor | 54,400 |
53,000 | |
Depreciation, office equipment | 7,700 |
Maintenance, factory equipment | 46,000 |
Miscellaneous factory overhead | 9,100 |
Rent, factory building | 99,000 |
Advertising expense | 97,000 |
Sales commissions | 39,000 |
Inventories: | ||
January 1, 2017 | December 31, 2017 | |
Direct materials | $ 9,400 | $18,000 |
Work in process | 6,500 | 26,000 |
Finished goods | 60,000 | 31,000 |
Visual Co. uses a normal-costing system and allocates overhead to work in process at a rate of $3.10 per direct manufacturing labor dollar. Indirect materials are insignificant so there is no inventory account for indirect materials.
Required
- 1. Prepare journal entries to record the transactions for 2017 including an entry to close out over- or underallocated overhead to cost of goods sold. For each
journal entry indicate the source document that would be used to authorize each entry. Also note which subsidiary ledger, if any, should be referenced as backup for the entry. - 2.
Post the journal entries to T-accounts for all of the inventories, Cost of Goods Sold, the Manufacturing Overhead Control Account, and the Manufacturing Overhead Allocated Account.
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4-30 Journal entries, T-accounts, and source documents. Visual Company produces gadgets for thecoveted small appliance market. The following data reflect activity for the year 2017:Costs incurred:Purchases of direct materials (net) on credit $121,000Direct manufacturing labor cost 87,000Indirect labor 54,400Depreciation, factory equipment 53,000Depreciation, office equipment 7,700Maintenance, factory equipment 46,000Miscellaneous factory overhead 9,100Rent, factory building 99,000Advertising expense 97,000Sales commissions 39,000Inventories:January 1, 2017 December 31, 2017Direct materials $ 9,400 $18,000Work in process 6,500 26,000Finished goods 60,000 31,000Visual Co. uses a normal-costing system and allocates overhead to work in process at a rate of $3.10 perdirect manufacturing labor dollar. Indirect materials are insignificant so there is no inventory account forindirect materials.1. Prepare journal entries to record the transactions for 2017 including an entry to close out over-…
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Chapter 4 Solutions
Horngren's Cost Accounting: A Managerial Emphasis (16th Edition)
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