Below are listed some transactions of Zintor Inc., which uses a job order cost accounting system. Prepare
Question:
Below are listed some transactions of Zintor Inc., which uses a job order cost accounting system.
Prepare the entries to record the transactions.
(1) Purchased materials costing $80,000 and incurred prepaid expenses amounting to $6,000, all on account.
(2) Requisitioned $25,000 worth of materials to be used directly in production
and $2,000 worth of materials to be used indirectly for repairs and maintenance.
(3) Factory labor used as follows: direct labor, $40,000; indirect labor, $3,000.
(4) Other costs incurred on account as follows: factory overhead, $13,000; selling expenses, $22,000; administrative expenses, $15,000.
(5) Prepaid expenses expired as follows: factory overhead, $8,000; selling expenses, $700; administrative expenses. $300.
(6) The predetermined rate for the application of factory overhead to jobs (work in process) was 80% of direct labor cost. (See Transaction 3.)
(7) The cost of jobs completed was $60,000.
(8) The sales on account for the period amounted to $200,000. The cost of goods sold was $120,000.
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