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prepare journal entries to record the preceding transactions including the transfer 626696

Green Thumb Landscaping Company uses a job cost system. As of 2010 January 1, its records showed the following inventory balances:

Materials (shrubs, trees, etc.)

$13,500

Work in process

25,800

Finished goods (Job No. 211)

30,000

The work in process inventory consisted of two jobs:

Job No.

 

Direct

Direct

Manufacturing

Total

   

Materials

Labor

Overhead

212

10 Downing St.

$4,500

$6,000

$2,400

$12,900

213

1010 Wilshire Blvd.

5,100

4,800

3,000

12,900

   

$9,600

$10,800

$5,400

$25,800

Here are data for the company for January: Materials purchased, USD 48,000. Landscaping direct labor costs: direct labor to Job No. 212, USD 12,000; to Job No. 213, USD 24,000; and to Job No. 214, USD 36,000. Indirect labor, USD 30,000. Direct materials used: direct materials for Job No. 212, USD 7,800; for Job No.213, USD 14,400; and for Job No. 214, USD 24,000. Supplies (indirect materials) used amounted to USD 1,200. Overhead is assigned to jobs at USD 3 per labor-hour, with 8,000 labor-hours to Job 212 and 2,000 labor-hours each to Jobs 213 and 214. Jobs 212 and 213 were completed and in Finished Goods Inventory at the end of January. Sales revenues for January were USD 45,000; cost of goods sold was USD 30,000  for Job No. 211 that was in Finished Goods Inventory on 2010 January 1. Overhead costs incurred other than indirect labor and indirect materials were depreciation, USD 3,000, and utilities, fuel, and miscellaneous, USD 3,000.

a. Prepare journal entries to record the preceding transactions, including the transfer of underapplied or overapplied overhead to Cost of Goods Sold.

b. Assuming selling and administrative expenses were USD 10,000, prepare an income statement for January.

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