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Kingsford Furnishings Company manufactures designer furniture. Kingsford Furnishings uses a job order cost system. Balances on April 1 from the materials ledger are as follows:
Fabric $58,300
Polyester filling 30,000
Lumber 58,800
Glue 9,950
The materials purchased during April on account are summarized from the receiving reports as follows:
Fabric $820,000
Polyester filling 315,000
Lumber 555,000
Glue 80,000
Materials were requisitioned to individual jobs as follows:
Fabric Polyester Filling Lumber Glue Total
Job 601 $190,000 $66,200 $118,500 $374,700
Job 602 365,000 152,100 219,300 736,400
Job 603 255,000 101,700 196,200 552,900
Factory overhead-indirect materials $83,600 83,600
Total $810,000 $320,000 $534,000 $83,600 $1,747,600
The glue is not a significant cost, so it is treated as indirect materials (factory overhead).
a. Journalize the entry to record the purchase of materials in April. If an amount box does not require an entry, leave it blank. b. Journalize the entry to record the requisition of materials in April. If an amount box does not require an entry, leave it blank.

Sagot :

Answer:

a. Debit Materials for $1,770,000; and Credit Account payable for $1,770,000.

b. Debit Work in process for $1,664,000; Debit Factory overhead for $83,600; and Credit Materials for $1,747,600.

Explanation:

a. Journalize the entry to record the purchase of materials in April. If an amount box does not require an entry, leave it blank.

The journal entries will look as follows:

Accounts Name                                     Debit ($)          Credit ($)    

Materials (w.1)                                        1,770,000  

  Account payable                                                         1,770,000

(To record the purchase of materials in April.)                                

b. Journalize the entry to record the requisition of materials in April. If an amount box does not require an entry, leave it blank.

The journal entries will look as follows:

Accounts Name                                         Debit ($)             Credit ($)    

Work in process (w.2)                               1,664,000

Factory overhead                                          83,600

   Materials                                                                             1,747,600

(To record to record the requisition of materials in April.)                        

Working:

w.1: Materials purchased = Fabric + Polyester filling + Lumber + Glue = $820,000 + $315,000 + $555,000 + $80,000 = $1,770,000

w.2: Work in process = Materials - Factory overhead = $1,747,600 - $83,600 = $1,664,000

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