For the year ended December 31, 2020, the job cost sheets of DeVoe Company contained the following data:

Prepare entries in a job-order cost system and a partial income statement.

Other data:

1. Raw materials inventory totalled $15,000 on January 1. During the year, $140,000 of raw materials were purchased on account.

2. Finished goods on January 1 consisted of Job No. 7638 for $87,000 and Job No. 7639 for $92,000.

3. Job No. 7640 and Job No. 7641 were completed during the year.

4. Jobs 7638, 7639, and 7641 were sold on account for $530,000 in total.

5. Manufacturing overhead incurred on account totalled $120,000.

6. Other manufacturing overhead consisted of indirect materials $14,000, indirect labour $18,000, and depreciation on factory machinery $8,000.

Instructions

a. Prove the agreement of Work in Process Inventory with job cost sheets pertaining to unfinished work.  Calculate each of the following, then post each to the T account:

(1) Beginning balance, 

(2) Direct materials, 

(3) Direct labour, 

(4) Manufacturing overhead, 

(5) Completed jobs. 

b. Prepare the adjusting entry for manufacturing overhead, assuming the balance is allocated entirely to Cost of Goods Sold.

c. Determine the gross profit to be reported for 2020.

Transcribed Image Text:

Job Number 7640 Balance 1/1 Current year's costs 7641 Balance 1/1 Direct Materials Direct Labour Manufacturing Overhead Total Costs $ 77,800 Explanation $25,000 $24,000 $28,800 30,000 36,000 43,200 109,200 18,000 48,000 11,000 21,600 50,600 148,600 Current year's costs 7642 Current year's costs 43,000 58,000 57,600 55,000 66,000 179,000