Explore BrainMass
Share

Explore BrainMass

    Quark Spy Equipment: Work in Process journal entries

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Quark Spy Equipment manufactures espionage equipment. Quark uses a job-order cost system and applies overhead to jobs the basis of direct labor-hours. For the current year, Quark estimated that it would work 100,000 direct labor-hours and incur $20,000,000 of manufacturing overhead cost. The following summarized information relates to January of the current year. The raw materials purchased include both direct and indirect materials.

    Raw materials purchased on account.......................................................... $1,412,000
    Direct materials requisitioned into production................................................ 1,299,500
    Indirect materials requisitioned into production.............................................. 98,000
    Direct labor cost (7,900 hours @$40 per hour).............................................. 316,000
    Indirect labor cost (10,200 hours @ $16 per hour).......................................... 163,200
    Depreciation on the factory building............................................................ 190,500
    Depreciation on the factory equipment......................................................... 890,700
    Utilities for the factory............................................................................... 79,600
    Cost of jobs finished................................................................................. 2,494,200
    Cost of jobs sold...................................................................................... 2,380,000
    Sales (all on account)............................................................................... 3,570,000

    Prepare journal entries to record Quark's transaction for the month of January. Do not close out the manufacturing overhead account.

    © BrainMass Inc. brainmass.com October 10, 2019, 6:01 am ad1c9bdddf
    https://brainmass.com/business/the-accounting-cycle/quark-spy-equipment-work-in-process-journal-entries-525173

    Solution Summary

    The three manufacturing inventory accounts shown as well as the journal entries needed. Click in cells to see activity.

    $2.19