Part -1:
For the year ended December 31, 2014, 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 |
|
$32,500 |
|
$31,200 |
|
$37,440 |
|
$101,140 |
|
|
Current year's costs |
|
39,000 |
|
46,800 |
|
56,160 |
|
141,960 |
| 7641 |
|
Balance 1/1 |
|
14,300 |
|
23,400 |
|
28,080 |
|
65,780 |
|
|
Current year's costs |
|
55,900 |
|
62,400 |
|
74,880 |
|
193,180 |
| 7642 |
|
Current year's costs |
|
75,400 |
|
71,500 |
|
85,800 |
|
232,700 |
1. Raw materials inventory totaled $19,500on January 1. During the year, $182,000of raw materials were purchased on account.
2. Finished goods on January 1 consisted of Job No. 7638 for $113,100and Job No. 7639 for $119,600.
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 $689,000.
5. Manufacturing overhead incurred on account totaled $156,000.
6. Other manufacturing overhead consisted of indirect materials $18,200, indirect labor $23,400, and depreciation on factory machinery $10,400.
Part -2:
Prove the agreement of Work in Process Inventory with job cost sheets pertaining to unfinished work. (Hint:Use a single T-account for Work in Process Inventory.) Calculate each of the following, then post each to the T-account: (1) beginning balance, (2) direct materials, (3) direct labor, (4) manufacturing overhead, and (5) completed jobs.
Prepare the adjusting entry for manufacturing overhead, assuming the balance is allocated entirely to Cost of Goods Sold
Determine the gross profit to be reported for 2014.