During November, these transactions took place in the Singer Manufacturing Company:
(a) Materials purchased on account, $35,600.
(b) Materials issued during the month as follows: to fill requisitions on job orders, $25,250; supplies issued to the factory, $1,300.
(c) Materials issued to complete defective units, $200.
(d) Freight paid for materials received, $850. (Freight is not added to unit costs on materials inventory cards.)
(e) Materials returned to the vendor during the month, $225.
(f) Scrap materials received in the storeroom were set up at a value of $175, and credit was given to Factory Overhead Control for that amount. A separate general ledger account, Scrap Materials, is used.)
(g) Materials returned to the storeroom during the month as follows: from job orders, $1,090; from supplies issued to the factory, $175.
(h) Total payroll for the month was as follows
:
Recorded and then paid liability for net pay to workers, $41,503.
Withheld for federal income tax, $7,780.
Withheld for hospitalization plan, $950.
Withheld for FICA tax, $2,367.
(i) Taxes were recorded for the employer's FICA tax. State unemployment insurance for the Sanger Manufacturing Company is 1.5% of total payroll, and the federal unemployment insurance rate is .5%. These taxes were charged to Factory Overhead Control.
(j) The payroll was distributed as follows: direct labor, $40,200; indirect labor, balance of payroll,
(k) Depreciation for the month: buildings, $3,000; machinery, $4,800.
(1) Property taxes accrued during the month, $750; insurance expired with a credit to the prepaid account, $850.
(m) Factory overhead is charged to production at a rate of $ 1 .40 per direct labor hour. Records show 19,200 direct labor hours used during the month.
(n) Close out the over- or underapplied factory overhead to Cost of Goods Sold.
(o) Cost of goods completed during the month, $81,750.
(p) Goods costing $75,500 were sold on account during the month at a sales price of $90,000.
(a) Materials purchased on account, $35,600.
(b) Materials issued during the month as follows: to fill requisitions on job orders, $25,250; supplies issued to the factory, $1,300.
(c) Materials issued to complete defective units, $200.
(d) Freight paid for materials received, $850. (Freight is not added to unit costs on materials inventory cards.)
(e) Materials returned to the vendor during the month, $225.
(f) Scrap materials received in the storeroom were set up at a value of $175, and credit was given to Factory Overhead Control for that amount. A separate general ledger account, Scrap Materials, is used.)
(g) Materials returned to the storeroom during the month as follows: from job orders, $1,090; from supplies issued to the factory, $175.
(h) Total payroll for the month was as follows
:
Recorded and then paid liability for net pay to workers, $41,503.
Withheld for federal income tax, $7,780.
Withheld for hospitalization plan, $950.
Withheld for FICA tax, $2,367.
(i) Taxes were recorded for the employer's FICA tax. State unemployment insurance for the Sanger Manufacturing Company is 1.5% of total payroll, and the federal unemployment insurance rate is .5%. These taxes were charged to Factory Overhead Control.
(j) The payroll was distributed as follows: direct labor, $40,200; indirect labor, balance of payroll,
(k) Depreciation for the month: buildings, $3,000; machinery, $4,800.
(1) Property taxes accrued during the month, $750; insurance expired with a credit to the prepaid account, $850.
(m) Factory overhead is charged to production at a rate of $ 1 .40 per direct labor hour. Records show 19,200 direct labor hours used during the month.
(n) Close out the over- or underapplied factory overhead to Cost of Goods Sold.
(o) Cost of goods completed during the month, $81,750.
(p) Goods costing $75,500 were sold on account during the month at a sales price of $90,000.
Required: (1) Journal entries to record these transactions. Indicate the subsidiary records to which the entries would also be posted.
(2) Ledger accounts for Work in Process, Factory Overhead Control, Materials, and Finished Goods. The November 1 balances were: Work in Process, $9,750; Materials, $6,180; Finished Goods, $5,660.
(3) What is the effect of closing over- or underapplied overhead to Cost of Goods Sold?