ECONOMICS

Given the following selected account balances of Shanta Company.

 

  Sales $ 1,250,000
  Raw materials inventory, Dec. 31, 2012 37,000
  Goods in process inventory, Dec. 31, 2012 53,900
  Finished goods inventory, Dec. 31, 2012 62,750
  Raw materials purchases 175,600
  Direct labor 225,000
  Factory computer supplies used 17,840
  Indirect labor 47,000
  Repairs—Factory equipment 5,250
  Rent cost of factory building 57,000
  Advertising expense 94,000
  General and administrative expenses 129,300
  Raw materials inventory, Dec. 31, 2013 42,700
  Goods in process inventory, Dec. 31, 2013 41,500
  Finished goods inventory, Dec. 31, 2013 67,300

 

Prepare its manufacturing statement for the year ended on December 31, 2013.

 

 

 

 

 

Following are the selected account balances of Shanta Company:

 

  Sales $ 1,250,000
  Raw materials inventory, Dec. 31, 2012 37,000
  Goods in process inventory, Dec. 31, 2012 53,900
  Finished goods inventory, Dec. 31, 2012 62,750
  Raw materials purchases 175,600
  Direct labor 225,000
  Factory computer supplies used 17,840
  Indirect labor 47,000
  Repairs—Factory equipment 5,250
  Rent cost of factory building 57,000
  Advertising expense 94,000
  General and administrative expenses 129,300
  Raw materials inventory, Dec. 31, 2013 42,700
  Goods in process inventory, Dec. 31, 2013 41,500
  Finished goods inventory, Dec. 31, 2013 67,300

 

Prepare an income statement for Shanta Company (a manufacturer). Assume that its cost of goods manufactured is $534,390.

 

 

 

 

Widmer Watercraft’s predetermined overhead rate for year 2013 is 200% of direct labor. Information on the company’s production activities during May 2013 follows.

 

a. Purchased raw materials on credit, $260,000.
b. Paid $127,800 cash for factory wages.
c. Paid $15,750 cash to a computer consultant to reprogram factory equipment.
d. Materials requisitions record use of the following materials for the month.

 

  Job 136 $ 49,000
  Job 137 32,500
  Job 138 19,800
  Job 139 23,400
  Job 140 7,400


  Total direct materials 132,100
  Indirect materials 21,000


  Total materials used $ 153,100





 

e. Time tickets record use of the following labor for the month.

 

  Job 136 $ 12,100
  Job 137 10,600
  Job 138 37,700
  Job 139 39,200
  Job 140 3,200


  Total direct labor 102,800
  Indirect labor 25,000


  Total $ 127,800





 

 f. Applied overhead to Jobs 136, 138, and 139.
 g. Transferred Jobs 136, 138, and 139 to Finished Goods.
 h. Sold Jobs 136 and 138 on credit at a total price of $535,000.
 i. The company incurred the following overhead costs during the month (credit Prepaid Insurance for expired factory insurance).

 

  Depreciation of factory building $ 69,500
  Depreciation of factory equipment 38,000
  Expired factory insurance 11,000
  Accrued property taxes payable 35,000

 

 j. Applied overhead at month-end to the Goods in Process (Jobs 137 and 140) using the predetermined overhead rate of 200% of direct labor cost.
Required:
1. Prepare a job cost sheet for each job worked on during the month.

 

2. Prepare journal entries to record the events and transactions a through j

3. Prepare T-accounts for each of the following general ledger accounts, each of which started the month with a zero balance: Raw Materials Inventory, Goods in Process Inventory, Finished Goods Inventory, Factory Payroll, Factory Overhead, Cost of Goods Sold. Then post the journal entries to these T-accounts and determine the balance of each account.

 

 

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