Reference no: EM13744728

Quark Spy Equipment manufactures espionage equipment. Quark uses a job-order costing system and applies overhead to jobs on the basis of direct labor-hours. For the current year, Quark estimated that it would work 100,000 direct labor-hours and incur $20,000,000 of manufacturing overhead cost.

The following summarized information relates to January of the current year. The raw materials purchased include both direct and indirect materials.

Raw Materials Purchased on Account................................. $1,412,000

Direct Materials requisitioned into production........................$1,299,500

Indirect Materials requisitioned into production......................$98,000

Direct labor cost (7,900 hours @ $40 per hour).....................$316,000

Indirect labor cost (10,200 hours @ $16 per hour)................$163,200

Depreciation on the factory building....................................$190,500

Depreciation on the factory equipment................................$890,700

Utilities for the factory.......................................................$79,600

Cost of jobs finished.........................................................$2,494,200

Cost of jobs sold..............................................................$2,380,000

Sales (all on account).......................................................$3,570,000

Use the following Chart of Accounts

Accounts Payable

Accounts Receivable

Accumulated Depreciation - Building

Accumulated Depreciation - Equipment

Administrative Expense

Allowance for Bad debt

Bad Debt Expense

Cash

Common Stock at par

Cost of Goods Sold

Depreciation Expense

Dividend Common Stock

Dividend Preferred Stock

Equipment

Factory

Finished Goods Inventory

Insurance expense

Interest Expense

Interest Payable

Interest Receivable

Interest Revenue

Inventory

Loss/Gain on Sale of Stock

Loss/Gain on Sale of Equipment

Manufacturing Overhead

Miscellaneous Expense

Note Payable – Current Portion

Note Payable – Short Term

Note Payable – Long Term

Note Receivable

Paid in Capital Common Stock

Paid in Capital Preferred Stock

Preferred Stock at $100 par

Prepaid Insurance

Prepaid rent

Raw Material Inventory

Rent Expense

Retained Earnings

Salary expense

Sales Revenue

Sales Commissions

Service charge expense

Service Revenue

Short term Investment - stock

Supplies

Supply Expense

Unearned Revenue

Unrealized Loss/Gain on Investments

Utility Expense

Warranty expense

Warranty payable

Work in Process Inventory

Prepare journal entries to record Quark's transactions for the month of January. Do not close out the manufacturing overhead account.

Account Name DEBIT CREDIT