The Polaris Company uses a job-order costing system. The following data relate to October, the first month of the company’s fiscal year.

Raw materials purchased on account $210,000.
Raw materials used to production, $190,000 ($178,000 direct materials amd $12,000 indirect materials).
Direct labor cost incurred, $90,000; indirect labor cost incurred, $110,00.
Depreciation recorded on factory equipmentnt, $40,000.
Other manufacturing overhead costs incurred during October, $70,000 (credit Accounts Payable).
The company applies manufacturing overhead cost to production on the basis of $8 per machine-hour. A total of 30,000 machine-hours were recorded for October.
Production orders costing $520,00 according to their job cost sheets were completed during October and transferred to Finished Goods.
Production orders that had cost $480,000 to complete according to their job cost sheets were shipped to customers during the month. These goods were sold on account at 25% above cost.

Required: 1. Prepare journal entries to record the information given above.

Prepare T-accounts for Manufacturing Overhead and Work in Process. Post the relevant information about to each account. Compute the ending balance in each account, assuming that Work in Process has a beginning balance of $42,000.

Requirement 1

J1

Raw materials $210,000 (debit)

Trade Payable $210,000 (credit)

J2

Work -In- Progress - Direct materials $178,000  (debit)

Work -In- Progress - Indirect materials $12,000 (debit)

Raw materials $190,000

J2

Work -In- Progress - Direct labor $90,000 (debit)

Work -In- Progress - Indirect labor  $110,000 (debit)

Wages and Salaries Payable $200,000(credit)

J4

Work -In- Progress - Depreciation $40,000 (debit)

Accumulated Depreciation - factory equipment $40,000 (credit)

J5

Overheads $70,000 (debit)

Payable $70,000 (credit)

J6

Work -In- Progress $240,000 (debit)

Overheads $240,000 (credit)

J7

Finished Goods $520,000 (debit)

Work - In - Progress $520,000 (credit)

Requirement 2

Manufacturing Overhead Account

Debit :

Payable $70,000

Under-Applied Overheads $170,000

Credit:

Work-in-Progress $240,000

Work in Process Account

Debit :

Work in Process Beginning $42,000

Raw materials $190,000

Wages and Salaries Payable $200,000

Accumulated Depreciation - factory equipment $40,000

Credit:

Finished Goods $520,000

Work in Process Ending $42,000

Explanation:

Prepare the journals as appropriate.

1   all nations face the problem of scarcity because there are limited resources and unlimited wants. nations do not have enough factors of production to produce everything that their population wants. entrepreneurial resources initiate businesses to make new goods and services; labor resources produce goods and services.

2 there are four factors of production: natural resources, labor resources, capital resources, and entrepreneurial resources. natural resources are raw materials from nature that are used to produce goods. trees, water, and grains are natural resources. some natural resources, such as wheat and cattle, are renewable

3 wants

things that you do not need to have in order to survive, but would like to have

needs

things that you must have in order to survive

goods

physical products

services

tasks that a business perform for customers

resources

items that people can use to make or obtain what they need or want

determine

to settle or decide by choice of alternatives or possiblities

4 i really dont know