Frontier Inc. has provided the following information for the year ended 20x8: Purchased raw materials on account for $240,000. Issued $230,000 in raw materials to production ($32,000 were not traceable to specific jobs). Incurred $242,000 in direct labor costs (24,120 hours) and $92,500 in supervision costs (paid in cash). Incurred the following additional manufacturing overhead costs: factory utilities $24,000 (paid in cash); depreciation on equipment $45,000; indirect supplies $17,500 (paid in cash). Incurred the following nonmanufacturing costs, both paid in cash: advertising $75,000; sales salaries $88,000. Applied manufacturing overhead to jobs in process at a rate of $9 per direct labor hour. Completed jobs costing a total of $644,000. Sold jobs for $856,000 on account. The cost of the jobs was $642,000. Closed the manufacturing overhead account balance. Prepare the journal entries to record these transactions. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

Question

contestada

Respuesta :

Supabrain Supabrain · Answer 1 · 2020-04-04T07:12:04+02:00

Answer:

JOURNAL ENTRIES

a) Debit Raw Material $240,000 Credit Accounts Payable $240,000

b) Debit Work in process $198,000 Debit Factory overheads $32,000 Credit Raw Material $230,000

c) Debit Work in process $242,000 Debit Factory overhead $92,500 Credit Bank $334,500

d) Debit Factory overhead ( utilities and indirect supplies) $41,500 Credit Bank $41,500

Debit Factory overhead ( depreciation) $45,000 Credit Accumulated depreciation on Equipment $45,000

e) Debit Sales and distribution cost (advertising and Salaries ) $163,000 Credit bank $163,000

f) Debit Work in process $217,080 Credit Factory overhead $217,080

g) Debit Finished goods $644,000 Credit work in process $644,000

h) Debit Accounts Receivable $856,000 Credit Revenue $856,000

Debit Cost of sales $642,000 Credit Finished goods $642,000

i) Debit Factory overhead $6,080 Credit Cost of sales $6,080

Explanation:

Closing off Manufacturing overhead

Dr = (32,000 +92,500+41,500+ 45,000) = $211,000

Cr = $9*24120 = $217,080

therefore Dr side is less than Credit meaning closing account is on debit side and the Account is over applied which decreases cost of sales.