Redmond Manufacturing Company Began Operations on January 1

Essay

Redmond Manufacturing Company began operations on January 1.The Company was affected by the following events during its first year of operation:
a)Company issued stock to owners for $100,000 cash.
b)Purchased materials,$8,000 for cash.
c)Transferred $4,000 of direct materials to production (Job #1: $3,000;Job #2: $1,000).
d)Paid direct labor costs,$5,000 (Job #1: $2,500;Job #2: $2,500).
e)Paid $3,000 cash for various actual overhead costs.
f)Allocated overhead to work in process at 60% of direct labor cost.
g)Completed Job #1 and transferred it to Finished Goods.
h)Sold Job #1 for $8,400 cash.
i)Paid $200 cash for selling and administrative expenses.
Required:
1)Record the above events in the T-accounts provided.Label your transactions (a)- (i).
2)Determine the ending balance in the work in process account.
3)Prepare a schedule of cost of goods manufactured and sold.
4)Compute the amount of gross profit earned on Job #1.