Iqbal Corporation produces special products to customers specifications and uses job order cost system. The following data
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Question:
Iqbal Corporation produces special products to customers’ specifications and uses job order cost system. The following data relates to its operations for the month of December, 2015:
- Purchased raw material on account Rs. 60,000
- Material issued to factory Rs. 45,000 of which Rs. 3,000 was used indirectly.
- Labour used: direct Rs. 70,000 and indirect Rs. 4,000.
- Factory overhead cost incurred Rs. 46,000
- Factory overhead is applied at 95% of direct labour cost.
- Job were completed to the extent of 90%.
- Goods sold on account Rs. 230,000
- Finished goods inventory at end valued at Rs. 15,000
Required
- General journal entries for each of the above transactions also make an adjusting entry of over or under applied FOH-Cost.
- Prepare T-Accounts of Goods in Process account, Finished Goods Account and Raw Material Account.
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