Business

Question

Journal Entries, T-Accounts Ehrling Brothers Company makes jobs to customer order. During the month of July, the following occurred: Materials were purchased on account for $45,670. Materials totaling $40,990 were requisitioned for use in producing various jobs. Direct labor payroll for the month was $22,400 with an average wage of $14 per hour. Actual overhead of $9,020 was incurred and paid in cash. Manufacturing overhead is charged to production at the rate of $5.50 per direct labor hour. Completed jobs costing $58,000 were transferred to Finished Goods. Jobs costing $59,000 were sold on account for $73,750. Make the entry to record the revenue from the sale first, followed by the entry to record the cost of the jobs. Beginning balances as of July 1 were: Materials Inventory $1,200 Work-in-Process Inventory 3,400 Finished Goods Inventory 2,630 Required: Message

1 Answer

  • Answer: See attachment

    Explanation:

    a. The journal entries for the preceding events have been attached. Note that for (e), work in process inventory was calculated as:

    = $22400 × 5.5/14 = $8800

    b. The ending balance for:

    Material inventory = 1200 + 44670 - 40990 = 5880

    Work in process inventory = 3400 + 40990 + 22400 + 8800 - 58000 = 17590

    Overhead control = 9020 - 8800 = 220

    Finished goods inventory = 2630 + 58000 - 59000 = 1630

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