Job Costing and Journal Entries for the Cost Accounting Cycle of a Municipality. 

The Intragovernmental Service Fund of Reading Township manufactures: 

(1) street and traffic signs for the Sanitation and Street Funds and 

(2) historical markers, information signs, and danger signs for the General Fund and Utility Fund. 

Each job is charged to these funds at prime costs (materials and labor) plus applied job overhead of 10% of prime costs. On November 1 there were no jobs-in-process inventories. During November these transactions occurred: 

(a) Materials purchased on account from nongovernmental agencies, $8,000; materials transferred in from the Special Revenue Fund, $2,000 (credit Due to Special Revenue Fund). 

(b) Actual job overhead, vouchered, $1,500. (The account is called Job Overhead Control instead of Factory Overhead.) 

(c) Total production costs incurred on jobs during November: Jobs for Materials Labor Sanitation and Street Fund $5,000 $7,500 General Fund 3,000 4,500 Utility Fund1,000 2,000. 

(d) From the payroll in (c), these deductions were made: FICA tax, $700; employee's federal income tax withheld, $1,600; union dues, $100; and employees' group insurance, $100. 

(e) Recorded the employer's payroll taxes for November. The city has achieved a merit rating that enables it to pay only 1.5% for state unemployment tax. 

(f) All jobs were completed and billed to the proper funds (for receivables, debit Due from Fund). 

(g) Close over- or underapplied job overhead to Cost of Jobs Billed. 

(h) Paid amount owed to the Special Revenue Fund. 

(i) Collected $10,000 from the Sanitation and Street Fund; $5,000 from the General Fund; and $3,000 from the Utility Fund. Required: General journal entries for the preceding transactions, using separate "jobs in process" accounts for each fund.

Answer rating: 100% (QA)

To record the transactions for the Intragovernmental Service Fund of Reading Township the following general journal entries should be made a To record ... View the full answer