Construction Accounting And Financial Management (4th Edition)
4th Edition
ISBN: 9780135232873
Author: Steven J. Peterson MBA PE
Publisher: PEARSON
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Textbook Question
Chapter 3, Problem 19P
Using the chart of accounts in Figure 2-1, determine the changes to the
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Answer the following questions by analysing the T-accounts given below.
a) Purchases of direct material
b) The cost of direct material used
c) Why does direct labor account has a credit balance of $5000? Explain
d) Direct labor costs assigned to production
e) The overhead as a percentage of direct labor costs
f) Total manufacturing costs charged to the Work in Process Inventory account during the current year
g) The cost of finished goods manufactured
h) The year-end balance in the Work in Process Inventory account
i) The cost of goods sold
j) The total amount of inventory listed in the hear-end balance sheet
k) Manufacturing overhead assigned to production
Required:
(a) What is the balance in the Cost of Goods Sold account after the adjustment?
(b) Compute, BuiltbyHands Stores‘gross profit earned on the jobs completed.
(c) Open T-accounts for Materials Inventory, Work in Process Inventory and Finished Goods Inventory. Post the appropriate entries to these accounts & determine the ending account balances.
Prepare a T-account for each account on the company’s balance sheet, and enter the beginning balances.
Make entries directly into the T-accounts for the transactions given above. Create new T-accounts as needed. Determine an ending balance for each T-account.
Was manufacturing overhead underapplied or overapplied for the year? Assume that the company allocates any overhead balance among the Work in Process, Finished Goods, and Cost of Goods Sold accounts, using the overall balances in each account. Prepare a journal entry to show the allocation. (Round allocation percentages to one decimal place.)
Prepare an income statement for the year. (Do not prepare a schedule of cost of goods manufactured; all of the information needed for the income statement is available in the T-accounts.)
Chapter 3 Solutions
Construction Accounting And Financial Management (4th Edition)
Ch. 3 - How do the relationships between the balance...Ch. 3 - Which of the transactions from this chapter result...Ch. 3 - Prob. 3DQCh. 3 - Which of the transactions from this chapter result...Ch. 3 - Prob. 5DQCh. 3 - Prob. 6DQCh. 3 - The following invoices are being entered into the...Ch. 3 - Prob. 9PCh. 3 - Using the chart of accounts in Figure 2-1,...Ch. 3 - Using the chart of accounts in Figure 2-1,...
Ch. 3 - Using the chart of accounts in Figure 2-1,...Ch. 3 - Using the chart of accounts in Figure 2-1,...Ch. 3 - Using the chart of accounts in Figure 2-1,...Ch. 3 - Using the chart of accounts in Figure 2-1,...Ch. 3 - Using the chart of accounts in Figure 2-1,...Ch. 3 - Using the chart of accounts in Figure 2-1,...Ch. 3 - Using the chart of accounts in Figure 2-1,...Ch. 3 - Using the chart of accounts in Figure 2-1,...
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- Which of the following accounts would be debited to record the factory supervisor's salary incurred during the period? Group of answer choices Salary expense Work-in-process inventory Costs of goods sold Manufacturing overheadarrow_forwardiv) What is balance on the Cost of Goods Sold account after the adjustmentv) Calculate the gross profit earned by Harriott on the jobs completed.vi) Determine the balance in work in process inventory on November 30arrow_forwardCategorize each of the following activities into the expenditure, conversion, or revenue cycles, and identify the applicable subsystem and give examples of each subsystem . a. Preparing the weekly payroll for manufacturing personnel b. Releasing raw materials for use in the manufacturing cycle c. Recording the receipt of payment for goods sold d. Recording the order placed by a customer e. Ordering raw materials f. Determining the amount of raw materials to order?arrow_forward
- 1. Describe when it is appropriate for a company to use a job-order cost system. 2.Calculate the dollar balance in ScaleDown's WIP inventory account as at May 31,2018 3.Calculate the dollar amount related to the playpens in ScaleDown's finished goods inventory as at May 31,2018 4.Explain the paper accounting treatment for over- or underapplied overhead balances when using a job-order cost systemarrow_forwardselected transactions for the current month are cated by letters in the following T accounts in a job er cost accounting system: Materials (a) Wages Payable (b) Factory Overhead (C) (a) (b) (c) (d) (e) cribe each of the five transactions. Work in Process (d) Finished Goods (e) Cost of Goods Soldarrow_forwardCategorize each of the following activities into the expenditure, conversion, or revenue cycles, and identify the applicable subsystem.a. preparing the weekly payroll for manufacturing personnelb. releasing raw materials for use in the manufacturing cyclec. recording the receipt of payment for goods soldd. recording the order placed by a customere. ordering raw materialsf. determining the amount of raw materials to orderarrow_forward
- The cost accountant prepares the cost of production summary by first collecting the period’s production costs from summaries of material requisitions, payroll, and factory overhead analysis sheets. True or False?arrow_forwardThe questions to be answered. What is balance on the Cost of Goods Sold account after the adjustment Calculate the gross profit earned by Harriott on the jobs completed. Determine the balance in work in process inventory on November 30.arrow_forwardIn a job order cost system, a credit to Work in Process Inventory will be accompanied by a debit to: *arrow_forward
- Account Titles and Explanation Debit Credit Direct Materials Inventory 583000 Accounts Payable 58300 (To record purchase of direct materials) Manufacturing Overhead 132000 (10 recora appiiea manuracturing overnead) Supplies Inventory 13200 7. Finished Goods Inventory 2410000 (To record use of indirect materials in production) Work in Process Inventory 569000 Work in Process Inventory 241000 56900 (To record transfer of completed goods to Finished Goods Inventory) Direct Materials Inventory (To record use of direct materials in production) 8. Cost of Goods Sold 2398000 Work in Process Inventory 791000 Wages Payable 79100 Finished Goods Inventory 239800 (To record direct labor payroll) (To record cost of goods sold for the period) Manufacturing Overhead 690000 Accounts Payable 690001 (To record actual manufacturing overhead) Work in Process Inventory 1071000 Manufacturing Overhead 107100arrow_forwardThe entry to record other factory overhead costs incurred during the month would include a.a debit to Factory Overhead. b.a debit to Work in Process. c.a credit to Work in Process. d.a credit to Factory Overhead.arrow_forwardIn the Excel, or spreadsheet, approach to recording financial transactions, the Manufacturing Overhead account is used to record two things-all actual overhead expenses and the amount of manufacturing overhead applied to production using the predetermined overhead rate. True or False True Falsearrow_forward
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