Kurtz Fencing Inc. uses a job order cost system. The following data summarize the operations related to production for March, the first month of operations: a. Materials purchased on account, $45,000.
b. Materials requisitioned and factory labor used:
Job Materials Factory Labor
301 $ 1,850 $2,500
302 3,150 7,220
303 2,200 5,350
304 1,800 2,400
305 4,230 6,225
306 1,770 2,900
For general factory use 1,200 5,000
c. Factory overhead costs incurred on account, $1,800.
d. Depreciation of machinery and equipment, $2,500.
e. The factory overhead rate is $30 per machine hour. Machine hours used:
Job Machine Hours
301 30
302 60
303 41
304 63
305 70
306 36
Total 300
f. Jobs completed: 301, 302, 303, and 305.
g. Jobs were shipped and customers were billed as follows: Job 301, $8,500; Job 302, $16,150; Job 303, $13,400.
Required:
1. Journalize the entries to record the summarized operations. Record each item (items a-f) as an individual entry on March 31. Record item g as 2 entries. Refer to the Chart of Accounts for exact wording of account titles.
2. Post the appropriate entries to T accounts for Work in Process and Finished Goods, using the identifying letters as transaction codes. Insert memo account balances as of the end of the month. For grading purposes enter transactions in alphabetical order. Determine the correct ending balance. The ending balance label is provided on the left side of the T account even when the ending balance is a credit. The unused cell on the balance line should be left blank.
3. Prepare a schedule of unfinished jobs to support the balance in the work in process account.*
4. Prepare a schedule of completed jobs on hand to support the balance in the finished goods account.*
* Refer to the list of Amount Descriptions for the exact wording of the answer choices for text entries.
CHART OF ACCOUNTS
Kurtz Fencing Inc.
General Ledger
ASSETS
110 Cash
121 Accounts Receivable
125 Notes Receivable
126 Interest Receivable
131 Materials
132 Work in Process
133 Factory Overhead
134 Finished Goods
141 Supplies
142 Prepaid Insurance
143 Prepaid Expenses
181 Land
191 Machinery and Equipment
192 Accumulated Depreciation-Machinery and Equipment
LIABILITIES
210 Accounts Payable
221 Utilities Payable
231 Notes Payable
236 Interest Payable
241 Lease Payable
251 Wages Payable
252 Consultant Fees Payable
EQUITY
311 Common Stock
340 Retained Earnings
351 Dividends
390 Income Summary
REVENUE
410 Sales
610 Interest Revenue
EXPENSES
510 Cost of Goods Sold
520 Wages Expense
531 Selling Expenses
532 Insurance Expense
533 Utilities Expense
534 Office Supplies Expense
540 Administrative Expenses
561 Depreciation Expense-Machinery and Equipment
590 Miscellaneous Expense
710 Interest Expense
Amount Descriptions
Balance of Work in Process, January 30
Finished Goods, January 30 (Job 305)
Job No. 301
Job No. 302
Job No. 303
Job No. 304
Job No. 305
Job No. 306