Chapter 16 PR 16-1B, PR 16-2B

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   Entries for Costs in a Job Order Cost System

   Royal Technology Company uses a job order cost system. The following data summarize the operations related to production for March:

   1. Materials purchased on account, $481,450.
   2. Materials requisitioned, $404,420, of which $52,570 was for general factory use.
   3. Factory labor used, $495,890, of which $94,220 was indirect.
   4. Other costs incurred on account for factory overhead, $115,550; selling expenses, $178,140; and administrative expenses, $105,920.
   5. Prepaid expenses expired for factory overhead were $22,150; for selling expenses, $18,780; and for administrative expenses, $13,480.
   6. Depreciation of factory equipment was $22,150; of office equipment, $32,740; and of office building, $64,510.
   7. Factory overhead costs applied to jobs, $274,430.
   8. Jobs completed, $635,510.
   9. Cost of goods sold, $616,260.

   Required:

   Journalize the entries to record the summarized operations. For a compound transaction, if an amount box does not require an entry, leave it blank.

   a. Materials purchased on account, $481,450.

   Entry	Description	Debit	Credit
   a.	Accounts PayableCashFactory OverheadFinished GoodsMaterialsWork in ProcessMaterials
   	Accounts PayableCashFactory OverheadFinished GoodsMaterialsWork in ProcessAccounts Payable

   b. Materials requisitioned, $404,420, of which $52,570 was for general factory use.

   Entry	Description	Debit	Credit
   b.	Accounts PayableCashCost of Goods SoldFinished GoodsMaterialsWork in ProcessWork in Process
   	Administrative ExpensesCashFactory OverheadFinished GoodsMaterialsSelling ExpensesFactory Overhead
   	Finished GoodsCashCost of Goods SoldFactory OverheadMaterialsWork in ProcessMaterials

   c. Factory labor used, $495,890, of which $94,220 was indirect.

   Entry	Description	Debit	Credit
   c.	Accounts PayableCashFinished GoodsMaterialsWages PayableWork in ProcessWork in Process
   	Accounts PayableCashCost of Goods SoldFinished GoodsFactory OverheadWages PayableFactory Overhead
   	Accounts PayableCashCost of Goods SoldFactory OverheadWages PayableWork in ProcessWages Payable

   d. Other costs incurred on account for factory overhead, $115,550; selling expenses, $178,140; and administrative expenses, $105,920.

   Entry	Description	Debit	Credit
   d.	Accounts PayableAccounts ReceivableCashFactory OverheadMaterialsPrepaid ExpensesFactory Overhead
   	Accounts PayableCashCost of Goods SoldFinished GoodsSelling ExpensesWork in ProcessSelling Expenses
   	Accounts PayableAdministrative ExpensesCashFinished GoodsMaterialsWork in ProcessAdministrative Expenses
   	Administrative ExpensesAccounts PayableAccounts ReceivableCashFactory OverheadSelling ExpensesAccounts Payable

   e. Prepaid expenses expired for factory overhead were $22,150; for selling expenses, $18,780; and for administrative expenses, $13,480.

   Entry	Description	Debit	Credit
   e.	Accounts ReceivableCashFactory OverheadFinished GoodsPrepaid ExpensesWork in ProcessFactory Overhead
   	CashCost of Goods SoldFinished GoodsMaterialsPrepaid ExpensesSelling ExpensesSelling Expenses
   	Accounts PayableAdministrative ExpensesCashFinished GoodsPrepaid ExpensesWork in ProcessAdministrative Expenses
   	Accounts ReceivableAdministrative ExpensesCashFactory OverheadPrepaid ExpensesSelling ExpensesPrepaid Expenses

   f. Depreciation of factory equipment was $22,150; of office equipment, $32,740; and of office building, $64,510.

   Entry	Description	Debit	Credit
   f.	Accumulated Depreciation-Buildings and EquipmentCashCost of Goods SoldFactory OverheadFinished GoodsWork in ProcessFactory Overhead
   	Accumulated Depreciation-Buildings and EquipmentCashFinished GoodsDepreciation Expense-Office EquipmentFinished GoodsMaterialsDepreciation Expense-Office Equipment
   	Accounts PayableAccumulated Depreciation-Buildings and EquipmentCashDepreciation Expense-Office BuildingFinished GoodsWork in ProcessDepreciation Expense-Office Building
   	Accumulated Depreciation-Buildings and EquipmentCashDepreciation Expense-Office EquipmentDepreciation Expense-Office BuildingFactory OverheadFinished GoodsAccumulated Depreciation-Buildings and Equipment

   g. Factory overhead costs applied to jobs, $274,430.

   Entry	Description	Debit	Credit
   g.	Accounts ReceivableCashFactory OverheadFinished GoodsMaterialsWork in ProcessWork in Process
   	Accounts PayableCashFactory OverheadFinished GoodsMaterialsWork in ProcessFactory Overhead

   h. Jobs completed, $635,510.

   Entry	Description	Debit	Credit
   h.	Accounts PayableCashCost of Goods SoldFinished GoodsMaterialsWork in ProcessFinished Goods
   	Accounts ReceivableAccounts PayableCashFactory OverheadFinished GoodsWork in ProcessWork in Process

   i. Cost of goods sold, $616,260.