Journal Entries for the Cost Accounting Cycle

Journal Entries for the Cost Accounting Cycle.

On October 1, the trial balance of the Durable Company showed
Accounts                                              Dr.              Cr.
Cash on Hand and in Bank            $ 25,800
Accounts Receivable                       47,740
Materials                                        44,880
Work in Process                             85,400
Finished Goods                               78,700
Plant and Machinery                     237,240
Accounts Payable                                              $ 54,270
Accrued Payroll                                                    6,600
Accumulated Depreciation — Plant & Machinery 11 5,210
Allowance for Doubtful Accounts                          2,825
Capital Stock                                                     80,000
Retained Earnings                                              260,855
                                                 $519,760       $519,760
During October these transactions took place

(a) Materials purchased (on account) $ 40,000
(b) Materials issued (direct) 65,000 « " (indirect) 3,500
(c) Materials returned to supplier 900
(d) Total payroll for month (direct) 80,000 « « « « (indirect) 9,500
(Assume there are no payroll deductions.)
(e) Wages paid during October 75,000
(f) Sundry manufacturing expenses incurred during October 12,000
(g) Marketing and administrative expenses incurred during October 8,500
(h) Accounts receivable collected 300,000
(i) Accounts payable paid 135,000
(j) Depreciation to be provided for October on plant and machinery at the rate of 10% per annum ?
(k) Factory overhead applied to production 14,200
(1) Work in process, October 31 75,000
(m) Cost of finished goods sold during October 205,000
(n) Sales made on account 285,000

Required: Journal entries for the above transactions
and seventy dollars of the taxes apply to salesman's salaries and $180 to office salaries.
(f) Sundry manufacturing expenses requiring an outlay of $10,000 were paid.
(g) Factory overhead of 90% of the direct labor cost is charged to production,
(h) Cost of production completed for the month totaled $75,000, and finished goods in the shipping room at the end of October totaled $10,000.
(i) Customers were billed for $122,000 for shipments made during October.
(j) Customers paid $68,000 on account.
Required: (1) Record in T accounts the transactions for October using one work in process account.
(2) Close the income statement accounts to Income Summary. Close underapplied factory overhead to Cost of Goods Sold.