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Computing and Journalizing Job Cost Data

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The Cabrillo Construction Company constructs houses on speculation. That is, the houses are begun before any buyer is known. Even if the buyer agrees to purchase a house under construction, no sales are recorded until the house is completed and accepted for delivery. The job-cost records contained the following (in thousands):

See attachment for data

1. Compute Cabrilloâ??s cost of (a) construction-in-process inventory at September 30 and October 31, (b) finished-houses inventory at September 30 and October 31, and (c) cost of houses sold for September and October.
2. Prepare summary journal entries for the transfer of completed houses from construction in process to finished houses for September and October.
3. Record the cash sale (price = $345,000) and cost of house sold for Job 53.

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Solution Summary

The Cabrillo Construction Company constructs houses on speculation. That is, the houses are begun before any buyer is known. Even if the buyer agrees to purchase a house under construction, no sales are recorded until the house is completed and accepted for delivery. The job-cost records contained the following (in thousands):

See attachment for data

1. Compute Cabrillo's cost of (a) construction-in-process inventory at September 30 and October 31, (b) finished-houses inventory at September 30 and October 31, and (c) cost of houses sold for September and October.
2. Prepare summary journal entries for the transfer of completed houses from construction in process to finished houses for September and October.
3. Record the cash sale (price = $345,000) and cost of house sold for Job 53.

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