Bergamo Bay's computer system generated the following trial
balance on December 31, 2017. The company’s manager knows something is wrong
with the trial balance because it does not show any balance for Work in Process
Inventory but does show a balance for the Factory Overhead account. In
addition, the accrued factory payroll (Factory Payroll Payable) has not been
recorded.
Debit
Credit
Cash $ 170,000
Accounts receivable 75,000
Raw materials inventory 80,000
Work in process inventory 0
Finished goods inventory 15,000
Prepaid rent 3,000
Accounts payable $
17,000
Notes payable 25,000
Common stock 50,000
Retained earnings 271,000
Sales 373,000
Cost of goods sold 218,000
Factory overhead 115,000
Operating expenses 60,000
Totals $ 736,000 $ 736,000
After examining various files, the manager identifies the
following six source documents that need to be processed to bring the
accounting records up to date.
Materials requisition 21-3010: $ 10,200
direct materials to Job 402
Materials requisition 21-3011: $ 18,600
direct materials to Job 404
Materials requisition 21-3012: $ 5,600
indirect materials
Labor time ticket 6052: $
36,000 direct labor to Job 402
Labor time ticket 6053: $
23,800 direct labor to Job 404
Labor time ticket 6054: $
8,200 indirect labor
Jobs 402 and 404 are the only units in process at year-end.
The predetermined overhead rate is 200% of direct labor cost.
Problem 2-2A Part 1
Direct materials
costs to Work in Process Inventory.
Direct labor costs
to Work in Process Inventory.
Overhead costs to
Work in Process Inventory.
Indirect materials
costs to the Factory Overhead account.
Indirect labor
costs to the Factory Overhead account.
Required:
1. Prepare journal entries to assign the above costs.
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