Entries for Costs in a Job Order Cost System
Royal Technology Company uses a job order cost system. The following data summarize the operations related to production for March:

a. Materials purchased on account, $770,000.
b. Materials requisitioned, $680,000, of which $75,800 was for general factory use.
c. Factory labor used, $756,000, of which $182,000 was indirect.
d. Other costs incurred on account for factory overhead, $245,000; selling expenses, $171,500; and administrative expenses, $110,600.
e. Prepaid expenses expired for factory overhead were $24,500; for selling expenses, $28,420; and for administrative expenses, $16,660.
f. Depreciation of factory equipment was $49,500; of office equipment, $61,800; and of office building, $14,900.
g. Factory overhead costs applied to jobs, $568,500.
h. Jobs completed, $1,500,000.
k. Cost of goods sold, $1,375,000.

Required:
Journalize the entries to record the summarized operations.

a.

Materials $770,000 (debit)

Accounts Payable $770,000 (credit)

b.

Work in Process: Direct $604,200  (debit)

Work in Process: Indirect $75,800 (debit)

Materials $680,000 (credit)

c.

Work in Process: Direct $574,200  (debit)

Work in Process: Indirect $182,000 (debit)

Salaries and Wages Payable $756,000 (credit)

d.

Work in Process $245,000 (debit)

Selling Expenses $171,500 (debit)

Payable $416,500 (credit)

e.

Work in Process : Overheads  $24,500 (debit)

Selling Expenses $28,420 (debit)

Administrative Expenses $16,660 (debit)

Cash (credit)

f.

Work in Process : Depreciation : factory equipment $49,500 (debit)

Depreciation : office equipment $61,800 (debit)

Depreciation : office building $14,900 (debit)

Accumulated Depreciation : factory equipment $49,500 (credit)

Accumulated Depreciation : office equipment $61,800 (credit)

Accumulated Depreciation : office building $14,900 (credit)

g.

Work in Process $568,500 (debit)

Overheads $568,500 (credit)

h.

Finished Goods $1,500,000 (debit)

Work in Process $1,500,000 (credit)

k.

Cost of goods sold, $1,375,000 (debit)

Cost of Goods Manufactured $1,375,000  (credit)

Explanation:

Prepare the Journals as appropriate in Work In Process Account.

Completed Goods are transferred to Finished goods Inventory

Cost of Sales comes from Cost of Goods Manufactured.

b

explanation:

you have to put the parentheses like this:

in fact, you have to perform the operation inside parentheses first, and then proceed in order: