Question 1 (14 marks) The following information has been taken from the accounting records of January Ltd:
Question:
Question 1 (14 marks)
The following information has been taken from the accounting records of January Ltd:
The company uses an actual costing system. Sales and expenses have been static for the past few periods.
Variable Selling expenses $79,000
Variable Utilities, factory/plant 8,000
Rent, office 26,000
Depreciation, factory/plant equipment, straight-line 24,000
Purchases of direct materials 81,000
Rent, factory/plant 54,000
Sales 550,000
Insurance, factory/plant 6,000
Fixed Administration expenses 56,000
Indirect materials 12,000
Depreciation, office equipment, straight-line 11,000
Indirect factory/plant labour costs incurred 10,000
Maintenance, factory/plant 35,000
The factory works are paid on average $20/hour and they worked 7,500 hours this year.
Inventories Opening Ending
Direct Materials $14,000 $18,000
Work in Process 30,000 30,000
Finished Goods 28,000 28,000
REQUIRED:
1.Make a schedule of COGM (9 marks) and COGS (3 marks)
2.Based on your numbers above, create the journal entries for the following: (2 marks each)
a. Direct materials used
Account Name Debit Credit
b. Cost of goods manufactured
Account Name Debit Credit
c. Cost of goods sold
Account Name Debit Credit
Intermediate Accounting
ISBN: 978-1118147290
15th edition
Authors: Donald E. Kieso, Jerry J. Weygandt, and Terry D. Warfield