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Problem 2-4A (Algo) Preparing job cost sheets, recording costs, preparing inventory ledger accounts LO P1, P2, P3

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Watercrafts predetermined overhead rate is 200% of direct labor. Information on the companys production activities during May follows.

1. Purchased raw materials on credit, $260,000.

Materials requisitions record use of the following materials for the month.

Job 136	$ 48,500
Job 137	33,500
Job 138	20,000
Job 139	22,800
Job 140	7,000
Total direct materials	131,800
Indirect materials	19,500
Total materials requisitions	$ 151,300

Time tickets record use of the following labor for the month. These wages were paid in cash.

Job 136	$ 12,100
Job 137	10,600
Job 138	37,700
Job 139	39,200
Job 140	3,200
Total direct labor	102,800
Indirect labor	24,500
Total labor cost	$ 127,300

1. Applied overhead to Jobs 136, 138, and 139.
2. Transferred Jobs 136, 138, and 139 to Finished Goods Inventory.
3. Sold Jobs 136 and 138 on credit at a total price of $535,000.
4. Recorded the cost of goods sold for Jobs 136 and 138.

Incurred the following actual other overhead costs during the month.

Depreciation of factory building	$ 69,000
Depreciation of factory equipment	38,000
Expired factory insurance	11,000
Accrued property taxes payable	36,500

1. Applied overhead at month-end to the Work in Process Inventory account (for Job 137 and 140) using the predetermined overhead rate of 200% of direct labor cost.

Problem 2-4A (Algo) Part 2

2. Prepare journal entries to record the events and transactions a through i

• Record raw material purchases on credit.
• Record the requisition of direct materials.
• Record the indirect materials.
• Record the entry for direct labor, paid in cash.
• Record the entry for indirect labor, paid in cash.
• Record the entry to apply overhead to jobs 136, 138 and 139.
• Record the transfer of completed jobs 136, 138 and 139 to finished goods.
• Record the entry for sales on account for Jobs 136 and 138.
• Record the entry for the cost of jobs 136 and 138.
• Record the entry for the actual overhead costs incurred.
• Record the entry to apply overhead to Jobs 137 and 140 (Work in Process).