Ateeq Generators is a manufacturer of power-generating equipment for commercial and industrial use. It commenced business on December 1. Below is a list of transactions conducted during its first month of operations:      

Transaction

$

1

Materials were purchased on credit terms.

400,000

2

Direct material was issued for Job A (for the manufacture of mobile generators).    

96,000

3

Direct material was issued for Job B (for the manufacture of diesel generators).

136,000

4

Direct material was issued for Job C (for the manufacture of portable generators).

30,000

5

Incurred direct labor cost on each of the jobs mentioned above as follows: job A, $9,000; job B, $11,000; job C, $5,000.         

6

Manufacturing overhead was applied to the jobs. The overhead rate used is 300% of direct labour dollars.

7

Job A and Job C were completed and moved to the finished goods warehouse.     

8

Job A was sold on credit terms for $200,000.

9

Actual manufacturing overhead incurred and paid for the month amounted to $78,000.

10

Manufacturing overhead was close to the Cost of Goods Sold.

a. Prepare the journal entries for the following transactions ONLY: 

Transactions 1, 4, 8

b. Compute the Cost of Goods Manufactured (COGM) for the month ended December 31. 

c. Compute the Cost of Goods Sold (COGS) for the month ended December 31.         

d. Compute the inventory balances reported in the company's Statement of Financial Position on December 31.

Answer rating: 100% (QA)

Stepbystep explanation a I made a journal entry for every tra... View the full answer