Fundamentals of Cost Accounting 2nd Edition by William Lanen, Carolyn Wells, Michael Maher

Exercise 21

Assigning Costs to Jobs
The following transactions occurred in April at Barry Snyder, Inc., a custom bicycle manufacturer:
1. Purchased $4,000 of materials.
2. Issued $200 of supplies from the materials inventory.
3. Purchased $5,000 of materials.
4. Paid for the materials purchased in transaction (1).
5. Issued $6,000 in direct materials to the production department.
6. Incurred direct labor costs of $5,000, which were credited to Wages Payable.
7. Paid $4,300 cash for utilities, power, equipment maintenance, and other miscellaneous items for the manufacturing shop.
8. Applied overhead on the basis of 125 percent of direct labor costs.
9. Recognized depreciation on manufacturing property, plant, and equipment of $1,000.
The following balances appeared in the accounts of Barry Snyder for April:

Required
a. Prepare journal entries to record the transactions.
b. Prepare T-accounts to show the flow of costs during the period from Materials Inventory through Cost of Goods Sold.