Problem - For the year ended December 31, 2017, the job cost sheets of Cinta Company contained the following data.
|
Job Number
|
Explanation
|
Direct Materials
|
Direct Labor
|
Manufacturing Overhead
|
Total Costs
|
|
7640
|
Balance 1/1
|
$29,250
|
$28,080
|
$33,696
|
$91,026
|
|
|
Current year's costs
|
35,100
|
42,120
|
50,544
|
127,764
|
|
7641
|
Balance 1/1
|
12,870
|
21,060
|
25,272
|
59,202
|
|
|
Current year's costs
|
50,310
|
56,160
|
67,392
|
173,862
|
|
7642
|
Current year's costs
|
67,860
|
64,350
|
77,220
|
209,430
|
Other data:
1. Raw materials inventory totaled $17,550 on January 1. During the year, $163,800 of raw materials were purchased on account.
2. Finished goods on January 1 consisted of Job No. 7638 for $101,790 and Job No. 7639 for $107,640.
3. Job No. 7640 and Job No. 7641 were completed during the year.
4. Job Nos. 7638, 7639, and 7641 were sold on account for $620,100.
5. Manufacturing overhead incurred on account totaled $140,400.
6. Other manufacturing overhead consisted of indirect materials $16,380, indirect labor $21,060, and depreciation on factory machinery $9,360.
Prove the agreement of Work in Process Inventory with job cost sheets pertaining to unfinished work.
Prepare the adjusting entry for manufacturing overhead, assuming the balance is allocated entirely to Cost of Goods Sold.