Problem 7-67 (Algo) Show Flow of Costs to Jobs (LO 7-2, 3) Manor Painting is a...

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Problem 7-67 (Algo) Show Flow of Costs to Jobs (LO 7-2, 3) Manor Painting is a commercial interior and exterior painting contractor specializing in commercial buildings. An inventory of materials and equipment is on hand at all times, so work can start as quickly as possible. Special equipment is ordered as required. On August 1, the Materials Inventory account had a balance of $54,300. The Work-in-Process Inventory account is maintained to record costs of work not yet complete. There were two such jobs on August 1 with the following costs: Job 84 $ 23,400 20,600 8,240 Materials and equipment Direct labor (wages payable) Materials and equipment Direct labor Overhead (applied) Overhead has been applied at 40 percent of the costs of direct labor using an annual rate. During August, Manor Painting started two new jobs. Additional work was carried out on Jobs 84 and 87. Job 87 was completed and billed to the customer. Details on the costs incurred on jobs during August follow: Job 87 $ 79,100 39,700 15,880 Job 84 $ 4,800 8,100 Job 87 $7,500 10,400 Job 88 $ 7,200 9,200 Job 90 $ 4,700 2,700 Other August Events 1. Purchased materials and equipment for $14,400. 2. Billed $195,300 to the customer for Job 87 and received payment for $115,300 of that amount. 3. Received $18,900 payment on Job 82 delivered to customer in July. 4. Determined that payroll for indirect labor personnel totaled $2,160. 5. Issued supplies and incidental materials for current jobs costing $780. 6. Recorded overhead and advertising costs for the operation as follows (all cash except equipment depreciation): Property taxes Storage area rental Truck and delivery cost Advertising and promotion campaign. Inspections Telephone and other miscellaneous Equipment depreciation $930 1,080 1,660 1,230 930 710 2,750 Required: a. Prepare journal entries to record the flow of costs for operations during August. b. Calculate the amount of over- or underapplied overhead for the month. This amount is debited or credited to Cost of Goods Sold. c. Determine inventory balances for Materials and Equipment Inventory and Work-in-Process Inventory. Journal entry worksheet < B Transaction 06 C Note: Enter debits before credits. Record entry D E Record overhead, advertising, and depreciation cost as per the table given above. General Journal F Clear entry G H 1 Debit Credit View general journal Journal entry worksheet A B C Transaction 07 Record charges to Work-in-Process. Note: Enter debits before credits. D E General Journal F G H Debit | Credit Journal entry worksheet A B Record transfer of Job 87. Transaction 08 C Note: Enter debits before credits. Record entry D E General Journal Clear entry F G H I Debit Credit View general journal Complete this question by entering your answers in the tabs below. Required A Required B Required C Calculate the amount of over- or underapplied overhead for the month. This amount is debited or credited to Cost of Goods Sold. Underapplied overhead Overapplied overhead Underapplied overhead < Required A Required C > Problem 7-67 (Algo) Show Flow of Costs to Jobs (LO 7-2, 3) Manor Painting is a commercial interior and exterior painting contractor specializing in commercial buildings. An inventory of materials and equipment is on hand at all times, so work can start as quickly as possible. Special equipment is ordered as required. On August 1, the Materials Inventory account had a balance of $54,300. The Work-in-Process Inventory account is maintained to record costs of work not yet complete. There were two such jobs on August 1 with the following costs: Job 84 $ 23,400 20,600 8,240 Materials and equipment Direct labor (wages payable) Materials and equipment Direct labor Overhead (applied) Overhead has been applied at 40 percent of the costs of direct labor using an annual rate. During August, Manor Painting started two new jobs. Additional work was carried out on Jobs 84 and 87. Job 87 was completed and billed to the customer. Details on the costs incurred on jobs during August follow: Job 87 $ 79,100 39,700 15,880 Job 84 $ 4,800 8,100 Job 87 $7,500 10,400 Job 88 $ 7,200 9,200 Job 90 $ 4,700 2,700 Other August Events 1. Purchased materials and equipment for $14,400. 2. Billed $195,300 to the customer for Job 87 and received payment for $115,300 of that amount. 3. Received $18,900 payment on Job 82 delivered to customer in July. 4. Determined that payroll for indirect labor personnel totaled $2,160. 5. Issued supplies and incidental materials for current jobs costing $780. 6. Recorded overhead and advertising costs for the operation as follows (all cash except equipment depreciation): Property taxes Storage area rental Truck and delivery cost Advertising and promotion campaign. Inspections Telephone and other miscellaneous Equipment depreciation $930 1,080 1,660 1,230 930 710 2,750 Required: a. Prepare journal entries to record the flow of costs for operations during August. b. Calculate the amount of over- or underapplied overhead for the month. This amount is debited or credited to Cost of Goods Sold. c. Determine inventory balances for Materials and Equipment Inventory and Work-in-Process Inventory. Journal entry worksheet < B Transaction 06 C Note: Enter debits before credits. Record entry D E Record overhead, advertising, and depreciation cost as per the table given above. General Journal F Clear entry G H 1 Debit Credit View general journal Journal entry worksheet A B C Transaction 07 Record charges to Work-in-Process. Note: Enter debits before credits. D E General Journal F G H Debit | Credit Journal entry worksheet A B Record transfer of Job 87. Transaction 08 C Note: Enter debits before credits. Record entry D E General Journal Clear entry F G H I Debit Credit View general journal Complete this question by entering your answers in the tabs below. Required A Required B Required C Calculate the amount of over- or underapplied overhead for the month. This amount is debited or credited to Cost of Goods Sold. Underapplied overhead Overapplied overhead Underapplied overhead < Required A Required C >

Answer rating: 100% (QA)

Parta Event Account 1 Material and Equipment inventory Cash To record purchase of inventory 18 1b 10 ... View the full answer