Business Assignment- Vaden Company
Vaden Company is a manufacturing firm that uses job-order costing. At the beginning of the year, the company’s inventory balances were as follows:
Raw materials $39,000
Work in process $49,000
Finished goods $10,000
The company applies overhead to jobs using a predetermined overhead rate based on machine-hours. At the beginning of the year, the company estimated that it would work 22,000 machine-hours and incur $264,000 in manufacturing overhead cost. The following transactions were recorded for the year:
i. Raw materials were purchased, $301,000.
ii. Raw materials were requisitioned for use in production, $292,000 ($273,000 direct and $19,000 indirect).
iii. The following employee costs were incurred: direct labor - $296,000; indirect labor - $81,000; and administrative salaries, $181,000.
iv. Selling costs, $130,000.
v. Factory utility costs, $18,000.
vi. Depreciation for the year was $162,000 of which $155,000 is related to factory operations and $7,000 is related to selling and administrative activities.
vii. Manufacturing overhead was applied to jobs. The actual level of activity for the year was 21,000 machine-hours.
viii. Goods totaling $839,000 were transferred to finished goods.
ix. Sales for the year totaled $1,200,000 and the costs on the job cost sheets of the goods that were sold totaled $824,000.
x. The balance in the Manufacturing Overhead account was closed out to Cost of Goods Sold.
My question: b. Show in T-accounts the year-end balances for each of the inventory accounts, the cost of goods sold and manufacturing overhead.
Raw materials $39,000
Work in process $49,000
Finished goods $10,000
The company applies overhead to jobs using a predetermined overhead rate based on machine-hours. At the beginning of the year, the company estimated that it would work 22,000 machine-hours and incur $264,000 in manufacturing overhead cost. The following transactions were recorded for the year:
i. Raw materials were purchased, $301,000.
ii. Raw materials were requisitioned for use in production, $292,000 ($273,000 direct and $19,000 indirect).
iii. The following employee costs were incurred: direct labor - $296,000; indirect labor - $81,000; and administrative salaries, $181,000.
iv. Selling costs, $130,000.
v. Factory utility costs, $18,000.
vi. Depreciation for the year was $162,000 of which $155,000 is related to factory operations and $7,000 is related to selling and administrative activities.
vii. Manufacturing overhead was applied to jobs. The actual level of activity for the year was 21,000 machine-hours.
viii. Goods totaling $839,000 were transferred to finished goods.
ix. Sales for the year totaled $1,200,000 and the costs on the job cost sheets of the goods that were sold totaled $824,000.
x. The balance in the Manufacturing Overhead account was closed out to Cost of Goods Sold.
My question: b. Show in T-accounts the year-end balances for each of the inventory accounts, the cost of goods sold and manufacturing overhead.
a. Prepare the appropriate journal entries for each of the above items.
i. Raw Materials $301,000
Accounts Payable $301,000
ii. Raw Materials for Use in Production $292,000
Accounts Payable $292,000
iii. Direct labor $296,000
Indirect labor $81,000
Adminstrative salaries $181,000
Salaries and Wages Payable $558,000
Iv. Selling costs $130.000
Cash $130,000
v. Factory Utility Costs $18,000
Accounts Payable $18,000
vi. Factory Depreciation $155,000
Selling and administrative depreciation $7,000
Accumulated depreciation $162,000
vii. Manufacturing Overhead $252,000
Accounts Payable $252,000
viii. Finished Goods $839,000
Finished Goods $839,000
ix. Cash $1,200,000
Sales $1,200,000
Cost of Goods Sold $824,000
Finished Goods $824,000
x. Cost of Goods Sold $38,000
Manufacturing Overhead $38,000
i. Raw Materials $301,000
Accounts Payable $301,000
ii. Raw Materials for Use in Production $292,000
Accounts Payable $292,000
iii. Direct labor $296,000
Indirect labor $81,000
Adminstrative salaries $181,000
Salaries and Wages Payable $558,000
Iv. Selling costs $130.000
Cash $130,000
v. Factory Utility Costs $18,000
Accounts Payable $18,000
vi. Factory Depreciation $155,000
Selling and administrative depreciation $7,000
Accumulated depreciation $162,000
vii. Manufacturing Overhead $252,000
Accounts Payable $252,000
viii. Finished Goods $839,000
Finished Goods $839,000
ix. Cash $1,200,000
Sales $1,200,000
Cost of Goods Sold $824,000
Finished Goods $824,000
x. Cost of Goods Sold $38,000
Manufacturing Overhead $38,000
USA 
India