Payson Company uses a job order costing system. The following is a partial list of the company's accounts.

Cash

Manufacturing Overhead

Sales

Cost of Goods Sold

Sales Commissions Expense

Administrative Expenses

Accounts Receivable

Commissions Payable

Required:

1. Prepare journal entries for each of the following transactions (omit explanations).

2. Prepare T-accounts and post the journal entries to the T-accounts. Transaction (a) has been completed as an example.

a. Raw materials previously purchased on account were paid for in cash, $700.

b. Raw materials were purchased for $1,500 on account.
c. Direct labor costs of $3,000 were recorded.
d. Direct materials costing $1,100 were issued directly to production.
e. Depreciation of $1,500 on manufacturing equipment was recorded. (Assume this is a product cost.)
f. Property taxes payable of $2,600 were recorded, half to manufacturing and half to administration.
g. Manufacturing overhead costs of $400 were applied to a job in process.
h. Materials previously purchased on account were paid for in cash, $1,500.
i. Sales commissions of $240 were recorded.
j. Goods costing $2,700 were transferred from Work-in-Process Inventory to Finished Goods Inventory,
k. Finished goods costing $2,300 were sold for $3,200 on credit, and the cost of goods sold wasrecorded.

Transcribed Image Text:

Accounts Payable Cash (a) (a) 700 700