[The following information applies to the questions displayed below.] Widmer Watercraft’s predetermined overhead rate for year 2015 is 200% of direct labor. Information on the company’s production activities during May 2015 follows.
a. Purchased raw materials on credit, $200,000.
b. Materials requisitions record use of the following materials for the month.
Job 136 $48,000
Job 137 32,000
Job 138 19,200
Job 139 22,400
Job 140 6,400
Total direct materials 128,000
Indirect materials 19,500
Total materials used $147,500
c. Paid $15,000 cash to a computer consultant to reprogram factory equipment.
d. Time tickets record use of the following labor for the month. These wages were paid in cash.
Job 136 $12,000
Job 137 10,500
Job 138 37,500
Job 139 39,000
Job 140 3,000
Total direct labor 102,000
Indirect labor 24,000
Total $126,000
e. Applied overhead to Jobs 136, 138, and 139.
f. Transferred Jobs 136, 138, and 139 to Finished Goods.
g. Sold Jobs 136 and 138 on credit at a total price of $525,000.
h. The company incurred the following overhead costs during the month (credit Prepaid Insurance for expired factory insurance).
Depreciation of factory building $68,000
Depreciation of factory equipment 36,500
Expired factory insurance 10,000
Accrued property taxes payable 35,000
i. Applied overhead at month-end to the Work in Process Inventory account (Jobs 137 and 140) using the predetermined overhead rate of 200% of direct labor cost.
REQUIRED.
Prepare journal entries to record the events and transactions a through i. REQUIRED

Widmer Watercraft

Journal Entries

Sr No                      Particulars                 Debit                   Credit

a.                      Materials                    $200,000

                     Accounts Payable                                         $ 200,000

Purchased raw materials on credit, $200,000.

b.             Work in Process Job 136        $ 48,000

              Work in Process Job 137            32,000

               Work in Process Job 138           19,200

              Work in Process Job 139           22,400

                Work in Process Job 140           6,400

                                       Materials                                      $  128,000  

Total direct materials 128,000 issued.

           Factory Overhead Control Account  19,500

                                    Materials                                      $  19,500  

Indirect materials 19,500 issued.

c.                  Factory Overhead- Equip       15,000

                                     Cash                                          15000    

Paid $15,000 cash to a computer consultant to reprogram factory equipment.

d.              Work in Process Job 136      $12,000

                Work in Process  Job 137      10,500

                 Work in Process Job 138      37,500

                 Work in Process Job 139      39,000

                Work in Process  Job 140       3,000      

       Factory Overhead Control Account  24,000

                    Wages Control Account                                $ 126,000

Total direct labor 102,000 charged to production, Indirect labor 24,000  Charged to  Factory Overhead.

e.                Work In Process Job 136      $24,000

                  Work in Process Job 138      75,000

                 Work in Process Job 139      78,000

                Applied Overhead                                           255,000

Applied overhead to Jobs 136, 138, and 139 at 200% of Direct Labor Cost.

         Applied Overhead Control Account  $ 255,000

               Factory Overhead Control Account                   $ 255,000

Applied Overhead Closed To Actual Overhead Account.

f.          Finished Goods Control  Account       $ 355,100

                                   Work in Process Job 136                  84000

                                   Work in Process Job 138                 131,700

                                     Work in Process Job 139              139,400

Transferred Jobs 136, 138, and 139 to Finished Goods.

g.                    Cost of Goods Sold          215,700

                      Finished Goods                                      215,700

Sold Jobs 136 and 138 on credit at a total price of $525,000.

                   Accounts Receivable          $525,000                

                                      Sales                                   $525,000

h.       Factory Overhead Control Account $ 149,500

               Provision For Depreciation Account            $68,000

               Prepaid Insurance Expense                           $ 10,000

    Accumulated Depreciation Factory Equip.             36,500

           Property Taxes Payable Account                      35,000

The company incurred the above overhead costs during the month.

i.          Work in Process  Job 136       21,000    

              Work in Process  Job 140       6,000    

               Factory Overhead Control Account              27,000

Applied overhead at month-end to the Work in Process Inventory account (Jobs 137 and 140) using the predetermined overhead rate of 200% .        

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