Problem 19-3A (Algo) Computing and recording job costs; preparing Income
statement and balance sheet LO P1, P2, P3, P4
[The following information applies to the questions displayed below.]
Bergo Bay's accounting system generated the following account balances on December 31. The
company's manager knows something is wrong with this list of balances because it does not show
any balance for Work In Process Inventory, and the accrued factory payroll (Factory Wages
Payable) has not been recorded.
Cash $ 70,000
Accounts receivable 39,000
Raw materials inventory 24,500
Work in process inventory 0
Finished goods inventory 12,000
Prepaid rent 4,000
Accounts payable $ 9,800
Notes payable 12,800
Common stock 40,000
Retained earnings (prior year) 94,000
Sales 178,900
Cost of goods sold 116,000
Factory overhead 25,000
General and administrative expenses 45,000
Totals $ 335,500 $ 335,500
These six documents must be processed to bring the accounting records up to date.
Materials requisition 10: $ 5,000 direct materials to Job 402
Materials requisition 11: $ 7,400 direct materials to Job 404
Materials requisition 12: $ 2,300 indirect materials
Labor time ticket 52: $ 6,000 direct labor to Job 402
Labor time ticket 53: $ 14,000 direct labor to Job 404
Labor time ticket 54: $ 5,000 indirect labor
Jobs 402 and 404 are the only Jobs in process at year-end. The predetermined overhead rate is
100% of direct labor cost
Problem 19-3A (Algo) Part 2
2-a. In Factory Overhead T-account, enter amounts from part 1 related to factory overhead. Determine the amount of
over- or underapplied overhead.
2-b. Prepare the entry to close any over- or underapplied overhead to Cost of Goods Sold.
