PROBLEM 5-22 T-Accounts; Overhead Rates; Journal Entries [LO3, LO4, LO5, L07] Kenworth Company uses a job-order...

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PROBLEM 5-22 T-Accounts; Overhead Rates; Journal Entries [LO3, LO4, LO5, L07] Kenworth Company uses a job-order costing system. Only three jobs-Job 105, Job 106, and Job 107- were worked on during November and December. Job 105 was completed on December 10; the other two jobs were still in production on December 31, the end of the company's operating year. Data from the job cost sheets of the three jobs follow: November costs incurred: Direct materials. Direct labour. Manufacturing overhead. December costs incurred: Direct materials.. Direct labour.. Manufacturing overhead. Job 105 Job Cost Sheet Job 106 Job 107 $16,500 $ 9,300 $ $13,000 $20.800 $ 7,000 $11,200 $ $ 000 $ $ 4,000 0 $ 8,200 $21,300 $ 6,000 $10,000 ? ? ? The following additional information is available: Manufacturing overhead is applied to jobs on the basis of direct labour cost. Balances in the inventory accounts at November 30 were as follows: Raw Materials. Work in Process Finished Goods.. $40,000 ? $85,000 Required: 1. 2. 3. 4. 5. Prepare T-accounts for Raw Materials, Work in Process, Finished Goods, and Manufacturing Overhead. Enter the November 30 inventory balances given above; in the case of Work in Process, compute the November 30 balance and enter it into the Work in Process T-account. Prepare journal entries for December as follows: a. b. C. Prepare an entry to record the issue of materials into production, and post the entry to appro- priate T-accounts. (In the case of direct materials, it is not necessary to make a separate entry for each job.) Indirect materials used during December totalled $4,000. Prepare an entry to record the incurrence of labour cost, and post the entry to appropriate T-accounts. (In the case of direct labour cost, it is not necessary to make a separate entry for each job.) Indirect labour cost totalled $8,000 for December. Prepare an entry to record the incurrence of $19,000 in various actual manufacturing overhead costs for December (credit Accounts Payable). Post this entry to the appropriate T-accounts. What apparent predetermined overhead rate does the company use to assign overhead cost to jobs? Using this rate, prepare a journal entry to record the application of overhead cost to jobs for December (it is not necessary to make a separate entry for each job). Post this entry to the appropriate T-accounts. As stated earlier, Job 105 was completed during December. Prepare a journal entry to show the transfer of this job off the production line and into the finished goods warehouse. Post the entry to the appropriate T-accounts. Determine the balance at December 31 in the Work in Process inventory account. How much of this balance consists of costs charged to Job 106? Job 107? PROBLEM 5-22 T-Accounts; Overhead Rates; Journal Entries [LO3, LO4, LO5, L07] Kenworth Company uses a job-order costing system. Only three jobs-Job 105, Job 106, and Job 107- were worked on during November and December. Job 105 was completed on December 10; the other two jobs were still in production on December 31, the end of the company's operating year. Data from the job cost sheets of the three jobs follow: November costs incurred: Direct materials. Direct labour. Manufacturing overhead. December costs incurred: Direct materials.. Direct labour.. Manufacturing overhead. Job 105 Job Cost Sheet Job 106 Job 107 $16,500 $ 9,300 $ $13,000 $20.800 $ 7,000 $11,200 $ $ 000 $ $ 4,000 0 $ 8,200 $21,300 $ 6,000 $10,000 ? ? ? The following additional information is available: Manufacturing overhead is applied to jobs on the basis of direct labour cost. Balances in the inventory accounts at November 30 were as follows: Raw Materials. Work in Process Finished Goods.. $40,000 ? $85,000 Required: 1. 2. 3. 4. 5. Prepare T-accounts for Raw Materials, Work in Process, Finished Goods, and Manufacturing Overhead. Enter the November 30 inventory balances given above; in the case of Work in Process, compute the November 30 balance and enter it into the Work in Process T-account. Prepare journal entries for December as follows: a. b. C. Prepare an entry to record the issue of materials into production, and post the entry to appro- priate T-accounts. (In the case of direct materials, it is not necessary to make a separate entry for each job.) Indirect materials used during December totalled $4,000. Prepare an entry to record the incurrence of labour cost, and post the entry to appropriate T-accounts. (In the case of direct labour cost, it is not necessary to make a separate entry for each job.) Indirect labour cost totalled $8,000 for December. Prepare an entry to record the incurrence of $19,000 in various actual manufacturing overhead costs for December (credit Accounts Payable). Post this entry to the appropriate T-accounts. What apparent predetermined overhead rate does the company use to assign overhead cost to jobs? Using this rate, prepare a journal entry to record the application of overhead cost to jobs for December (it is not necessary to make a separate entry for each job). Post this entry to the appropriate T-accounts. As stated earlier, Job 105 was completed during December. Prepare a journal entry to show the transfer of this job off the production line and into the finished goods warehouse. Post the entry to the appropriate T-accounts. Determine the balance at December 31 in the Work in Process inventory account. How much of this balance consists of costs charged to Job 106? Job 107?