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H3Ko H3Ko
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5 years ago
Journalize the following transactions for Malone Custom Furniture Manufacturing:
a.   Incurred and paid advertising expenses, $3,500.
b.   Incurred manufacturing wages of $30,000, 60% of which was direct labor and 40% of which was indirect labor.
c.   Purchased raw materials on account, $27,000.
d.   Used in production: direct materials, $12,000; indirect materials,$5,500
e.   Recorded manufacturing overhead: depreciation on plant, $14,000; plant insurance (previously paid), $1,800; plant property tax, $4,500 (credit Property Tax Payable).
f.   Allocated manufacturing overhead to jobs, 150% of direct labor costs.
g.   Completed production on jobs with costs of $55,000.
h.   Sold inventory on account, $64,000; cost of goods sold, $35,000.
i.   Adjusted for overallocated or underallocated overhead.
Textbook 

Horngren's Financial & Managerial Accounting, The Financial Chapters


Edition: 5th
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Mrgo-breedMrgo-breed
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Item   Accounts and Explanation   Debit   Credit
a.   Advertising Expenses   3,500   
        Cash      3,500
         
b.   Work-in-Process Inventory              18,000   
   Manufacturing Overhead              12,000   
        Wages Payable      30,000

c.   Raw Materials Inventory   27,000   
        Accounts Payable      27,000
         
d.   Work-in-Process Inventory              12,000   
   Manufacturing Overhead               5,500   
        Raw Materials Inventory      17,500
         
e.   Manufacturing Overhead              14,000   
        Accumulated DepreciationPlant      14,000
         
   Manufacturing Overhead                1,800   
        Prepaid Insurance      1,800
         
   Manufacturing Overhead               4,500   
        Property Tax Payable      4,500
          
f.   Work-in-Process Inventory ($18,000 × 150%)              27,000   
         Manufacturing Overhead      27,000
         
g.   Finished Goods Inventory         55,000   
        Work-in-Process Inventory      55,000
         
h.   Accounts Receivable             64,000   
        Sales Revenue      64,000
         
   Cost of Goods Sold             35,000   
        Finished Goods Inventory      35,000
         
i.   Cost of Goods Sold   10,800   
        Manufacturing Overhead      10,800
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