T-accounts and journal entries for Kenworth Company

Kenworth Company uses a job-order costing system. Only three jobs?Job 105, Job 106, and Job
107?were worked on during November and December. Job 105 was completed on December 10;
the other two jobs were still in production on December 31, the end of the company's operating
year. Data from the job cost sheets of the three jobs follows:

The following additional information is available:
a. Manufacturing overhead is applied to jobs on the basis of direct labour cost.
b. Balances in the inventory accounts at November 30 were as follows:

Prepare T-accounts for Raw Materials, Work in Process, Finished Goods, and Manufacturing
Overhead. Enter the November 30 inventory balances given above; in the case of Work in
Process, compute the November 30 balance and enter it into the Work in Process T-account.

2. Prepare journal entries for December as follows:
a. Prepare an entry to record the issue of materials into production and post the entry to appropriate
T-accounts. (In the case of direct materials, it is not necessary to make a separate
entry for each job.) Indirect materials used during December totalled $4,000.
b. Prepare an entry to record the incurrence of labour cost and post the entry to appropriate
T-accounts. (In the case of direct labour cost, it is not necessary to make a separate
entry for each job.) Indirect labour cost totalled $8,000 for December.
c. Prepare an entry to record the incurrence of $19,000 in various actual manufacturing
overhead costs for December (credit Accounts Payable). Post this entry to the appropriate
T-accounts.
3. What apparent predetermined overhead rate does the company use to assign overhead cost
to jobs? Using this rate, prepare a journal entry to record the application of overhead cost to
jobs for December (it is not necessary to make a separate entry for each job). Post this entry
to the appropriate T-accounts.
4. As stated earlier, Job 105 was completed during December. Prepare a journal entry to show the
transfer of this job off of the production line and into the finished goods warehouse. Post the
entry to the appropriate T-accounts.
5. Determine the balance at December 31 in the Work in Process inventory account. How much
of this balance consists of costs charged to Job 106? Job 107?