Compute the necessary journal entries to account

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Reference no: EM132639718

The balance, as at 30 November 20X8, in the MOH account was $9,250 Dr. In December 20X8, actual MOH incurred was $109,350 and applied MOH for the 3 jobs were yet to be recorded.

In January 20x9, there was a phone call from the customer of Job #124 informing RIS that 50 units of watches were found to have broken glass faces. RIS has accepted responsibility for the return of the watches and the customer does not want replacements.

Required:

Question (a) Compute and record the necessary journal entries to account for the production costs and sales of Job #124 completed in the last week of December 20X8.

Question (b) Based on information obtained in January 20X9 from the customer of Job #124, prepare necessary journal entries to record the costs related to the return of the 50 damaged units which were to be treated as abnormal spoilage. Explain the impact on profits of Job #124 if the damaged units were treated as normal spoilage instead (show workings where relevant).

Question (c) Calculate the over/under applied MOH for the year ended 31 December and create journal entry to close this MOH variance.

Reference no: EM132639718

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