Ialani Corp. uses a job order costing system for the yachts it constructs. On September 1, 2010,

Question:

Ialani Corp. uses a job order costing system for the yachts it constructs. On September 1, 2010, the company had the following account balances:

Raw Material Inventory ........ $332,400

Work in Process Inventory .....1,512,600

Cost of Goods Sold ........4,864,000

On September 1, the three jobs in Work in Process Inventory had the following balances:

Job #75 ........$586,400

Job #78 ....... 266,600

Job #82 ....... 659,600

The following transactions occurred during September:

Sept. 1 Purchased $1,940,000 of raw material on account.

4 Issued $1,900,000 of raw material as follows:

Job #75, $289,600; Job #78, $252,600;

Job #82, $992,200; Job #86, $312,400; and indirect material, $53,200.

15 Prepared and paid the $757,000 factory payroll for September 1â€“15.

Analysis of this payroll showed the following information:

Ialani Corp. uses a job order costing system for the

15 On each payroll date, Ialani Corp. applies manufacturing overhead to jobs at a rate of $12.50 per direct labor hour.
15 Job #75 was completed, accepted by the customer, and billed at a selling price of cost plus 30 percent. Selling prices are rounded to the nearest whole dollar.
20 Paid the following monthly factory bills: utilities, $39,600; rent, $70,600; and accounts payable (accrued in August), $196,800.
24 Purchased raw material on account, $624,000.
25 Issued $772,200 of raw material as follows: Job #78, $154,800; Job #82, $212,600; Job #86, $349,000; and indirect material, $55,800.
30 Recorded additional factory overhead costs as follows: depreciation, $809,000; expired prepaid insurance, $165,400; and accrued taxes and licenses, $232,400.
30 Recorded and paid the factory payroll for September 16â€“30 of $714,400. Analysis of the payroll follows:

30 Applied overhead for the second half of the month to jobs.
a. Journalize the September transactions.
b. Use T-accounts to post the information from the journal entries in (a) to the job cost subsidiary accounts and to general ledger accounts.
c. Reconcile the September 30 balances in the subsidiary ledger with the Work in Process Inventory account in the general ledger.
d. Determine the amount of underapplied or overapplied overhead forSeptember.

Accounts Payable
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