Part 1 - do the transactions up to and including January 17 Record the transactions on the journal link provide in the next Module page and save this file. Once complete, upload your file and submit it. DO NOT SCAN AND TRY TO SEND YOUR PROJECT. See the Submit green tab above in the module. MAKE SURE YOU USE THE GENERAL LEDGER ACCOUNTS NUMBERS FOR ALL YOUR POSTING REFERENCES IN THE GENERAL JOURNAL. DON'T FORGET TO ALSO POST TO THE FOUR GENERAL LEDGER ACCOUNTS (SUPPLIES - ALLOWANCE FOR DOUBTHFUL ACCOUNTS - FACTORY OVERHEADSALARIES PAYABLE) AND THE JOB COST SHEETS. The transactions in this practice set were completed by Hydro Paddle Boards, Inc. during January, the first month of the company's fiscal year. Hydro Paddle Boards, Inc. is a manufacturing corporation that designs and manufactures a limited variety of custom stand-up paddle (SUP) boards. The SUP boards vary in size and performance, including beginner, intermediate, advanced, competition, and racing boards. Hydro Paddle Boards, Inc. maintains a job-order cost system. You have accepted a position with Hydro Paddle Boards, Inc. as assistant controller, and you will begin your duties on January 1 of the current year. In your review of the previous assistant controller's records, you notice some jobs were incomplete as of December 31 of the previous year. These jobs are contained in the Job Cost Records. You plan to complete most of these jobs in January and to accept new jobs from dealers and other builders. You are responsible for the daily accounting operations, preparation of interim financial statements, and end-of-month adjusting and closing entries. Hydro Paddle Boards, Inc, manufactures all products in a single production department. An individual job-order cost sheet is maintained for each job. The job-order cost sheet contains accumulated costs for each job, including actual direct materials, actual direct labor, and applied factory overhead. Gross pay for direct labor is recorded by a debit to Work in Process. Salaries for all other factory personnel are recorded by a debit to Factory Overhead. Salaries of non-factory personnel are recorded at the end of each month by a debit to the appropriate salary expense accounts. Deductions for employees' FICA and federal income taxes are recorded whenever gross pay is recorded, using the simplified rates of 8% (for FICA, including Medicare) and 15% (for federal income tax). All wages are paid on the last day of the month. All employer payroll taxes are recorded at the end of the month. Payroll taxes related to factory personnel are debited to Factory Overhead. Payroll taxes related to all other company personnel are debited to Payroll Taxes Expense-General. Column Break Hydro Paddle Boards, Inc. maintains two materials accounts, one for Direct Materials and one for Indirect Materials and Factory Supplies. Hydro Paddle Boards, Inc. maintains two materlals accounts, one for Direct Materials and one for Indirect Materials and Factory Supplies. Factory overhead is applied to each job based on 130% of direct labor cost for that job (was 125% in Dec). Hydro Paddle Boards, Inc. maintains only one factory overhead account. Remember that debits to Factory Overhead represent actual overhead and credits to Factory Overhead represent applied overhead. Since the difference between actual factory overhead and applied factory overhead is insignificant, the overapplied or underapplied balance is closed out to Sold as an adjusting entry at the end of each month. Sold as an adjusting entry at the end of each month. Hydro Paddle Boards, Inc. marks up all work by 40% of the job cost. Refer to the individual Job Cost Record for the total cost of the job, and multiply the total cost by 140% to determine the selling price for each job. Since Hydro Paddle Boards, Inc. sells to dealers, sales are exempt from state sales tax. All sales are on account and are subject to terms of 2/10, net 30 days, FOB shipping point. Sales to credit customers expected to take the discount are recorded at the discounted amount. Sales to credit customers who do not normally pay within the discount period are recorded at the gross amount. Since Hydro Paddle Boards, Inc. sells by custom order, it does not accept returns of merchandise. Accounts Payable is used solely for the purchase of direct materials and indirect materials and factory supplies. All vendors expect full payment within 30 days. Operating expenses, with the exception of any accrued salaries, payroll taxes, property taxes, and income taxes, are paid when incurred. All cash received is deposited in the bank, and all payments are made by check. When dealing with an accounts receivable or accounts payable item, be sure to record the company name in the General Journal and post to the Accounts Receivable Ledger or Accounts Payable Ledger. It is January 1 , and you are ready to assume your new responsibilities. Good luck! Section 1 a 2018 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Section Hydro Paddle Boards, Inc. MANUAL INSTRUCTIONS 1. Journalize the entries for the month of January in the General Journal. When using the work in process account, be sure to post to the appropriate Job Cost Record. NARRATIVE OF TRANSACTIONS Section Note: Certain transactions, such as those dealing with payroll, require detailed computational work before preparing the journal entry. These transactions are explained initially in the narrative as they occur. Please refer to the original transaction when preparing a subsequent similar transaction. Note: Certain transactions, such as those dealing with payroll, require detailed computational work before preparing the journal entry. These transactions are explained initially in the narrative as they occur. Please refer to the original transaction when preparing a subsequent similar transaction. Jan. 2 Paid Salt Water Mall $9,200.00 for January rent. Of this amount, 35% is for office facilities and 65% is for factory facilities. 3 Paid Hi-Foam Products Company \$16,826.24 in payment of the December 31 balance. Received a check from Calm Waters Board Corporation for the amount due (check AR schedule). 4 Paid Marine National Bank \$47,533.48 for December payroll taxes payable as follows: Employees' Income Tax Payable, \$28,353.78; FICA Tax Payable, \$17,928.88; Federal Unemployment Tax, \$438.38; State Unemployment Tax, \$812.44. Column Break Applied factory overhead to Job No. 1403 is based upon 130% of direct labor cost.(note this was 125% last December but company has a new rate this year) Jan. 4 Transferred the completed job to the finished goods account. 5 Sold and shipped Job No. 1403 toS Boards, Inc. marks up all work by 40% of the job cost. Refer to the individual Job Cost Record for the total cost of the job, and multiply the total cost by 140% to determine the selling price. SaltWaterHut is not expected to pay within the discount period. Hydro Paddle Boards, Inc. maintains a perpetual inventory system. Each time a sale is made to a customer, you must debit Cost of Goods Sold and credit Finished Goods for the cost of the job. 8 Requisitioned $2,532.54 of indirect materials and factory supplies to be used in the manufacture of all jobs currently in process. (Materials Requisition No. 1680) Section Paid $13,946.72 for Income Tax Payable. Paid Coco PVC Company $21,428.00 in payment of the December 31 balance. Applied $8,248.00 of direct materials ( 1679 ) and \$18,240.00 of direct labor (Time Ticket No. 258) to Job No. 1403 , which will complete the job. Use the simplified rates of 8% of gross pay for employees' FICA tax and 15% of gross pay for employees' federal income tax. When preparing the entry for applying direct labor, debit Work in Process for the gross pay, and credit Employees' Income Tax Payable and FICA Tax Payable for the appropriate amounts and Salaries Payable for net pay. Remember that employees are paid on the last day of each month. 9 Purchased from GT Matrix Corporation $4,982.52 of indirect factory supplies, credit terms net 15 days. Accepted a job for the manufacture of 66 units B1 (Beginner SUP) paddle boards for Rio Watersports. The promise date is February 14 . The company began the job today, applying $11,928.00 of direct materials to Job No. 1406 . (Materials Requisition No. 1681) 10 Received a check from Tarpon Sports Ltd. for the amount due. 11 Paid Light Hardware, Inc. $18,200.00 in payment of the December 31 balance. Section Section Section Jan. 11 Applied $2,854.28 of direct materials to Job No. 1402. (Materials Requisition No. 1682) 12 Received a check from Go Paddle Sales Company for the amount due. 15 Applied $5,128.12 of direct materials to Job No. 1404. (Materials Requisition No. 1683) 15 Applied $5,128.12 of direct materials to Job No. 1404. (Materials Requisition No. 1683) 16 Purchased $1,486.00 of factory supplies from Keys Supplies Inc. and paid cash. End of Part 1 18 Received a report from the treasurer that Blue Runner Sports Dealers, one of our customers, has declared bankruptcy. Wrote off the balance owed to Hydro Paddle Boards, Inc. by Blue Runner Sports Dealers. 18 Sold and shipped Job No. 1405 to the appropriate customer. Refer to that job's Cost Record for the total cost of the job to determine the selling price. The customer is not expected to pay within the discount period. 22 Purchased $22,964.32 of direct materials from K.C. Epoxy Supply Company, credit terms net 30 days. Column Break Part 1 - do the transactions up to and including January 17 Record the transactions on the journal link provide in the next Module page and save this file. Once complete, upload your file and submit it. DO NOT SCAN AND TRY TO SEND YOUR PROJECT. See the Submit green tab above in the module. MAKE SURE YOU USE THE GENERAL LEDGER ACCOUNTS NUMBERS FOR ALL YOUR POSTING REFERENCES IN THE GENERAL JOURNAL. DON'T FORGET TO ALSO POST TO THE FOUR GENERAL LEDGER ACCOUNTS (SUPPLIES - ALLOWANCE FOR DOUBTHFUL ACCOUNTS - FACTORY OVERHEADSALARIES PAYABLE) AND THE JOB COST SHEETS. The transactions in this practice set were completed by Hydro Paddle Boards, Inc. during January, the first month of the company's fiscal year. Hydro Paddle Boards, Inc. is a manufacturing corporation that designs and manufactures a limited variety of custom stand-up paddle (SUP) boards. The SUP boards vary in size and performance, including beginner, intermediate, advanced, competition, and racing boards. Hydro Paddle Boards, Inc. maintains a job-order cost system. You have accepted a position with Hydro Paddle Boards, Inc. as assistant controller, and you will begin your duties on January 1 of the current year. In your review of the previous assistant controller's records, you notice some jobs were incomplete as of December 31 of the previous year. These jobs are contained in the Job Cost Records. You plan to complete most of these jobs in January and to accept new jobs from dealers and other builders. You are responsible for the daily accounting operations, preparation of interim financial statements, and end-of-month adjusting and closing entries. Hydro Paddle Boards, Inc, manufactures all products in a single production department. An individual job-order cost sheet is maintained for each job. The job-order cost sheet contains accumulated costs for each job, including actual direct materials, actual direct labor, and applied factory overhead. Gross pay for direct labor is recorded by a debit to Work in Process. Salaries for all other factory personnel are recorded by a debit to Factory Overhead. Salaries of non-factory personnel are recorded at the end of each month by a debit to the appropriate salary expense accounts. Deductions for employees' FICA and federal income taxes are recorded whenever gross pay is recorded, using the simplified rates of 8% (for FICA, including Medicare) and 15% (for federal income tax). All wages are paid on the last day of the month. All employer payroll taxes are recorded at the end of the month. Payroll taxes related to factory personnel are debited to Factory Overhead. Payroll taxes related to all other company personnel are debited to Payroll Taxes Expense-General. Column Break Hydro Paddle Boards, Inc. maintains two materials accounts, one for Direct Materials and one for Indirect Materials and Factory Supplies. Hydro Paddle Boards, Inc. maintains two materlals accounts, one for Direct Materials and one for Indirect Materials and Factory Supplies. Factory overhead is applied to each job based on 130% of direct labor cost for that job (was 125% in Dec). Hydro Paddle Boards, Inc. maintains only one factory overhead account. Remember that debits to Factory Overhead represent actual overhead and credits to Factory Overhead represent applied overhead. Since the difference between actual factory overhead and applied factory overhead is insignificant, the overapplied or underapplied balance is closed out to Sold as an adjusting entry at the end of each month. Sold as an adjusting entry at the end of each month. Hydro Paddle Boards, Inc. marks up all work by 40% of the job cost. Refer to the individual Job Cost Record for the total cost of the job, and multiply the total cost by 140% to determine the selling price for each job. Since Hydro Paddle Boards, Inc. sells to dealers, sales are exempt from state sales tax. All sales are on account and are subject to terms of 2/10, net 30 days, FOB shipping point. Sales to credit customers expected to take the discount are recorded at the discounted amount. Sales to credit customers who do not normally pay within the discount period are recorded at the gross amount. Since Hydro Paddle Boards, Inc. sells by custom order, it does not accept returns of merchandise. Accounts Payable is used solely for the purchase of direct materials and indirect materials and factory supplies. All vendors expect full payment within 30 days. Operating expenses, with the exception of any accrued salaries, payroll taxes, property taxes, and income taxes, are paid when incurred. All cash received is deposited in the bank, and all payments are made by check. When dealing with an accounts receivable or accounts payable item, be sure to record the company name in the General Journal and post to the Accounts Receivable Ledger or Accounts Payable Ledger. It is January 1 , and you are ready to assume your new responsibilities. Good luck! Section 1 a 2018 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Section Hydro Paddle Boards, Inc. MANUAL INSTRUCTIONS 1. Journalize the entries for the month of January in the General Journal. When using the work in process account, be sure to post to the appropriate Job Cost Record. NARRATIVE OF TRANSACTIONS Section Note: Certain transactions, such as those dealing with payroll, require detailed computational work before preparing the journal entry. These transactions are explained initially in the narrative as they occur. Please refer to the original transaction when preparing a subsequent similar transaction. Note: Certain transactions, such as those dealing with payroll, require detailed computational work before preparing the journal entry. These transactions are explained initially in the narrative as they occur. Please refer to the original transaction when preparing a subsequent similar transaction. Jan. 2 Paid Salt Water Mall $9,200.00 for January rent. Of this amount, 35% is for office facilities and 65% is for factory facilities. 3 Paid Hi-Foam Products Company \$16,826.24 in payment of the December 31 balance. Received a check from Calm Waters Board Corporation for the amount due (check AR schedule). 4 Paid Marine National Bank \$47,533.48 for December payroll taxes payable as follows: Employees' Income Tax Payable, \$28,353.78; FICA Tax Payable, \$17,928.88; Federal Unemployment Tax, \$438.38; State Unemployment Tax, \$812.44. Column Break Applied factory overhead to Job No. 1403 is based upon 130% of direct labor cost.(note this was 125% last December but company has a new rate this year) Jan. 4 Transferred the completed job to the finished goods account. 5 Sold and shipped Job No. 1403 toS Boards, Inc. marks up all work by 40% of the job cost. Refer to the individual Job Cost Record for the total cost of the job, and multiply the total cost by 140% to determine the selling price. SaltWaterHut is not expected to pay within the discount period. Hydro Paddle Boards, Inc. maintains a perpetual inventory system. Each time a sale is made to a customer, you must debit Cost of Goods Sold and credit Finished Goods for the cost of the job. 8 Requisitioned $2,532.54 of indirect materials and factory supplies to be used in the manufacture of all jobs currently in process. (Materials Requisition No. 1680) Section Paid $13,946.72 for Income Tax Payable. Paid Coco PVC Company $21,428.00 in payment of the December 31 balance. Applied $8,248.00 of direct materials ( 1679 ) and \$18,240.00 of direct labor (Time Ticket No. 258) to Job No. 1403 , which will complete the job. Use the simplified rates of 8% of gross pay for employees' FICA tax and 15% of gross pay for employees' federal income tax. When preparing the entry for applying direct labor, debit Work in Process for the gross pay, and credit Employees' Income Tax Payable and FICA Tax Payable for the appropriate amounts and Salaries Payable for net pay. Remember that employees are paid on the last day of each month. 9 Purchased from GT Matrix Corporation $4,982.52 of indirect factory supplies, credit terms net 15 days. Accepted a job for the manufacture of 66 units B1 (Beginner SUP) paddle boards for Rio Watersports. The promise date is February 14 . The company began the job today, applying $11,928.00 of direct materials to Job No. 1406 . (Materials Requisition No. 1681) 10 Received a check from Tarpon Sports Ltd. for the amount due. 11 Paid Light Hardware, Inc. $18,200.00 in payment of the December 31 balance. Section Section Section Jan. 11 Applied $2,854.28 of direct materials to Job No. 1402. (Materials Requisition No. 1682) 12 Received a check from Go Paddle Sales Company for the amount due. 15 Applied $5,128.12 of direct materials to Job No. 1404. (Materials Requisition No. 1683) 15 Applied $5,128.12 of direct materials to Job No. 1404. (Materials Requisition No. 1683) 16 Purchased $1,486.00 of factory supplies from Keys Supplies Inc. and paid cash. End of Part 1 18 Received a report from the treasurer that Blue Runner Sports Dealers, one of our customers, has declared bankruptcy. Wrote off the balance owed to Hydro Paddle Boards, Inc. by Blue Runner Sports Dealers. 18 Sold and shipped Job No. 1405 to the appropriate customer. Refer to that job's Cost Record for the total cost of the job to determine the selling price. The customer is not expected to pay within the discount period. 22 Purchased $22,964.32 of direct materials from K.C. Epoxy Supply Company, credit terms net 30 days. Column Break