Warning: foreach() argument must be of type array|object, bool given in /var/www/html/web/app/themes/studypress-core-theme/template-parts/header/mobile-offcanvas.php on line 20

Question: Journalize the following transactions for Marge’s Sofas. Explanations are not required.

e. Recorded manufacturing overhead: depreciation on plant, \(18,000; plant insurance (previously paid), \)1,500; plant property tax, $3,900 (credit Property Tax Payable).

Short Answer

Expert verified

Date

Particulars

Debit ($)

Credit ($)

Manufacturing overhead

23,400

Accumulated depreciation

18,000

Prepaid plant insurance

1,500

Property tax payable

3,900

Step by step solution

01

Step-by-Step Solution:Step 1: Depreciation

Depreciation is defined as the reduction in the book value of the fixed assets of the company. It is recorded as an indirect expense in the income statement.

02

Recording of manufacturing overhead in the books of the company

The manufacturing overhead are recorded as by debiting the manufacturing overhead account and by crediting the accumulated depreciation, prepaid plant insurance and the property tax payable account.

Unlock Step-by-Step Solutions & Ace Your Exams!

  • Full Textbook Solutions

    Get detailed explanations and key concepts

  • Unlimited Al creation

    Al flashcards, explanations, exams and more...

  • Ads-free access

    To over 500 millions flashcards

  • Money-back guarantee

    We refund you if you fail your exam.

Over 30 million students worldwide already upgrade their learning with Vaia!

One App. One Place for Learning.

All the tools & learning materials you need for study success - in one app.

Get started for free

Most popular questions from this chapter

Superior Construction, Inc. is a home builder in Arizona. Superior uses a job order costing system in which each house is a job. Because it constructs houses, the company uses an account titled Construction Overhead. The company applies overhead based on estimated direct labor costs. For the year, it estimated construction overhead of \(1,150,000 and total direct labor costs of \)5,750,000. The following events occurred during August:

a. Purchased materials on account, \(400,000.

b. Requisitioned direct materials and used direct labor in construction. Recorded the materials requisitioned.

Direct material

Direct Labor

House 402

\)58,000

\(44,000

House 403

62,000

32,000

House 404

61,000

58,000

House 405

86,000

57,000

c. The company incurred total wages of \)300,000. Use the data from Item b to assign the wages. Wages are not yet paid.

d. Depreciation of construction equipment, \(6,700.

e. Other overhead costs incurred: Equipment rentals paid in cash, \)30,000; Worker liability insurance expired, \(7,000.

f. Allocated overhead to jobs.

g. Houses completed: 402, 404.

h. House sold on account: 404 for \)250,000.

Requirements

1. Calculate Superior’s predetermined overhead allocation rate for the year.

2. Prepare journal entries to record the events in the general journal.

3. Open T-accounts for Work-in-Process Inventory and Finished Goods Inventory.

Post the appropriate entries to these accounts, identifying each entry by letter.

Determine the ending account balances, assuming that the beginning balances

were zero.

4. Add the costs of the unfinished houses, and show that this total amount equals the ending balance in the Work-in-Process Inventory account.

5. Add the costs of the completed house that has not yet been sold, and show that this equals the ending balance in Finished Goods Inventory.

6. Compute gross profit on the house that was sold. What costs must gross profit

cover for Superior Construction?

Question: Journalize the following transactions for Marge’s Sofas. Explanations are not required.

d. Used in production: direct materials, \(7,500; indirect materials, \)5,000.

Question: Journalize the following transactions for Marge’s Sofas. Explanations are not required.

f. Allocated manufacturing overhead to jobs, 200% of direct labor costs.

Question: What is the purpose of a job cost record?

Question: How is manufacturing overhead allocated to jobs?

See all solutions

Recommended explanations on Business Studies Textbooks

View all explanations

What do you think about this solution?

We value your feedback to improve our textbook solutions.

Study anywhere. Anytime. Across all devices.

Sign-up for free