Smith & Co.
Balance Sheet
December 31, 2017
Assets
Cash $15,000
Accounts Receivable 22,000
Prepaid Insurance 3,000
Material Inventory 2,000
WIP inventory 2,900
FG inventory 1,200
Equipment 50,000
(Accum. Dep) (10,000)
Total Assets $86,100
Liabilities & Equity
Accounts Payable $20,000
Wages Payable 3,000
Property Taxes Payable 1,000
Common Stock 40,000
Retained Earnings 22,100
Total Liabilities & Equity $86,100
Instructions:
1. Open the balances in the general ledger.
2. Post the entries for job order production costs to the general ledger.
3. Prepare a statement of cost of goods manufactured and cost of goods sold, an income statement and a balance sheet.
Entries for Job Order Production Costs
1. Raw Materials Inventory 3,650
Accounts Payable 3,650
Acquired materials on credit for factory use.
2. Work in Process Inventory 1,700
Raw Materials Inventory 1,700
To assign costs of direct materials used.
3. Factory Overhead 650
Raw Materials Inventory 650
To record use of indirect materials.
4. Factory Payroll 5,350
Cash (and other accounts) 5,350
To record salaries and wages of factory workers
(including various payroll liabilities)
5. Work in Process Inventory 4,100
Factory Payroll 4,100
To assign cost of direct labor used.
6. Factory Overhead 1,250
Factory Payroll 1,250
To record indirect labor costs as overhead.
7. Factory Overhead 5,100
Cash (and other accounts) 5,100
To record factory overhead costs such as insurance,
utilities, rent, and depreciation.
8. Work in Process Inventory 5,740
Factory Overhead 5,740
To apply overhead at 140% of direct labor.
9. Finished Goods Inventory 8,980
Work in Process Inventory 8,980
To record completion of Jobs B15, B 16, and B17.
10. Cash 10,600
Sales 10,600
Cost of Goods Sold 5,560
Finished Goods Inventory 5,560
To record sale of Jobs B15 and B16.
1. What is the ending cash balance?
A. $18,300
B. $26,350
C. $15,150
D. $19,400
2. What is the ending accounts receivable balance?
A. $22,000
B. $19,000
C. $21,000
D. $25,000
3. What is the ending prepaid insurance balance?
A. $1,000
B. $2,000
C. $2,500
D. $3,000
4. What is the ending materials inventory balance?
A. $4,450
B. $3,300
C. $2,700
D. $2,600
5. What is the ending work in process balance?
A. $5,200
B. $4,670
C. $5,150
D. $5,460
6. What is the ending finished goods balance?
A. $4,620
B. $4,950
C. $5,285
D. $4,900
7. What is the ending equipment balance net of accumulated depreciation?
A. $50,000
B. $40,000
C. $35,000
D. $30,000
8. What is the ending accounts payable balance?
A. $19,600
B. $21,500
C. $22,850
D. $23,650
9. What is the ending retained earnings balance?
A. $24,600
B. $25,880
C. $23,900
D. $21,820
10. What is the adjustment to factory overhead?
A. $1,260 debit
B. $1,260 credit
C. $1,350 debit
D. $1,350 credit
11. What is cost of goods sold before the adjustment?
A. $5,560
B. $4,650
C. $5,600
D. $5,750
12. What is cost of goods sold after the adjustment?
A. $6,700
B. $6,300
C. $5,900
D. $6,820
13. What is the cost of goods manufactured?
A. $9,600
B. $9,100
C. $8,200
D. $8,980
14. What is net income?
A. $3,500
B. $3,780
C. $3,200
D. $3,150
15. What is total assets?
A. $93,530
B. $92,900
C. $99,400
D. $91,000
16. What represents the correct order of the job order costing process?
A. supplier, materials, work in process, finished goods, retail
B. materials, work in process, retail, finished goods
C. finished goods, materials, work in process, retail
D. retail, work in process, materials, finished goods
17. Which account keeps track of the costs on the assembly line?
A. finished goods
B. work in process
C. materials
D. equipment
18. What are prime costs?
A. direct materials + direct labor
B. direct labor + overhead
C. direct labor
D. overhead
19. What are conversion costs?
A. direct materials + direct labor
B. direct labor
C. direct labor + overhead
D. overhead
20. What is the formula for cost of goods manufactured?
A. BWIP + DM + DL + OH applied – EWIP
B. BWIP + DM + DL + OH applied
C. BWIP + DM
D. DM + DL + OH