Quark Spy Equipment manufactures espionage equipment. Quark uses a job-order costing system and applies overhead to jobs on the basis of direct labor-hours. For the current year, Quark estimated that it would work 100,000 direct labor-hours and incur $20,000,000 of manufacturing overhead cost.
The following summarized information relates to January of the current year. The raw materials purchased include both direct and indirect materials.
Raw Materials Purchased on Account................................. $1,412,000
Direct Materials requisitioned into production........................$1,299,500
Indirect Materials requisitioned into production......................$98,000
Direct labor cost (7,900 hours @ $40 per hour).....................$316,000
Indirect labor cost (10,200 hours @ $16 per hour)................$163,200
Depreciation on the factory building....................................$190,500
Depreciation on the factory equipment................................$890,700
Utilities for the factory.......................................................$79,600
Cost of jobs finished.........................................................$2,494,200
Cost of jobs sold..............................................................$2,380,000
Sales (all on account).......................................................$3,570,000
Use the following Chart of Accounts
Accounts Payable
Accounts Receivable
Accumulated Depreciation - Building
Accumulated Depreciation - Equipment
Administrative Expense
Allowance for Bad debt
Bad Debt Expense
Cash
Common Stock at par
Cost of Goods Sold
Depreciation Expense
Dividend Common Stock
Dividend Preferred Stock
Equipment
Factory
Finished Goods Inventory
Insurance expense
Interest Expense
Interest Payable
Interest Receivable
Interest Revenue
Inventory
Loss/Gain on Sale of Stock
Loss/Gain on Sale of Equipment
Manufacturing Overhead
Miscellaneous Expense
Note Payable – Current Portion
Note Payable – Short Term
Note Payable – Long Term
Note Receivable
Paid in Capital Common Stock
Paid in Capital Preferred Stock
Preferred Stock at $100 par
Prepaid Insurance
Prepaid rent
Raw Material Inventory
Rent Expense
Retained Earnings
Salary expense
Sales Revenue
Sales Commissions
Service charge expense
Service Revenue
Short term Investment - stock
Supplies
Supply Expense
Unearned Revenue
Unrealized Loss/Gain on Investments
Utility Expense
Warranty expense
Warranty payable
Work in Process Inventory
Prepare journal entries to record Quark's transactions for the month of January. Do not close out the manufacturing overhead account.
Account Name DEBIT CREDIT