Journal entries for work in process

Assignment Help Accounting Basics
Reference no: EM1356497

Quark Spy Equipment manufactures espionage equipment. Quark uses a job-order cost system and applies overhead to jobs 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

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

Reference no: EM1356497

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