2023 Problem 1 Journal Entries Record the following journal entries for TEB Company in good | Assignments Online

Problem 1. Journal Entries

Record the following journal entries for TEB Company in good form and without abbreviations.

Do not provide explanations beneath your journal entries.

a. Raw materials used in production total $35,000: $30,000 direct and $5,000 indirect

b. Salaries and wages costs incurred/accrued, but not yet paid, $115,000:

Direct manufacturing labor cost, $60,000

Indirect manufacturing labor cost, $40,000

Sales salaries, $15,000

c. Depreciation on factory equipment, $38,000

d. Manufacturing overhead is applied at a predetermined rate of 200% of direct labor cost

e. Cost of goods manufactured for the month, $160,000

f. Goods costing $150,000 to produce were sold on credit for $225,000. Only record the goods leaving the company. Assume someone else will record the credit sale.

Problem 2. Cost of Goods Sold section of income statement

Prepare for Buttross Company, in good form and without abbreviations, the Cost of Goods Sold section of the income statement (Only the cost of goods sold section. )

In order to present cost of goods sold, you will need to compute the cost of goods manufactured. Do NOT present a Statement of Cost of Goods Manufactured in your solution and do NOT show the computation of cost of goods manufactured .

The following costs relate to one month’s operations:

Indirect labor400

Rent on factory building350

Maintenance of factory equipment100

Direct material used1,200

Utilities in factory200

Direct labor1,500

Selling expense900

Administrative expense700

Work in process, beginning800

Work in process, end600

Finished goods, beginning500

Finished goods, end250

Problem 3. Activity-Based Costing

Prepare for World Company, in good form and without abbreviations, a computation of the estimated product cost per unit for the current period using the activity-based costing approach.

World Company manufactures two products, Product X and Product Z. The company estimates it will incur $100,000 of manufacturing overhead for the current period. Overhead currently is assigned to the products using direct labor hours. Data concerning the current period’s operations under the traditional system are:

Product XProduct Z

Estimated volume in units4001,500

Direct labor hours per unit0.701.20

Direct materials cost per unit$10.50$16.75

Direct labor cost per unit$11.25$20.00

Manufacturing overhead cost per unit*$33.66$57.70

* Using direct labor hours as the allocation base: 400 units x 0.7 direct labor hours per unit + 1,500 units x 1.2 direct labor hours per unit = 2,080 estimated direct labor hours; $100,000 estimated manufacturing overhead/2,080 direct labor hours (DLH) = $48.08 per DLH; $48.08 x 0.70 = $33.66 and $48.08 x 1.20 = $57.70.

In order to compute estimated cost under activity-based costing, the company has identified two activity cost pools, broken down the estimated overhead, and estimated activity levels as follows:

EstimatedEstimated Activity

Activity Cost PoolOverheadProduct XProduct ZTotal

Setup machines$ 20,000200300500

Prepare purchase orders80,0009005001,400

Total$100,000

Problem 4. Cash Budget

Prepare for StartUp Company, in good form and without abbreviations, a cash budget for the month of January, 2015.

StartUp Company has asked you to prepare a cash budget for the month of January 2015, using the following information:

Projected cash balance at December 31, 2014, $2,000

Minimum cash balance desired January 31, 2015, $4,000.

Minimum cash balance desired, December 31, 2015, $8,000

Projected transactions in January are:

Cash collections from sales$25,000

Cash from tax refund14,000

Purchases of merchandise inventory10,000

Selling and administrative expenses (excluding depreciation)25,000

Depreciation of building and equipment15,000

Purchases of store equipment(one-half to be paid in February)40,000

Declaration of a dividend (100% to be paid in February)12,000

Amortization of patents11,000

Where a projected transaction involves a cash outlay, unless otherwise noted the cash will be paid in January.

The company has a line of credit at the bank, which allows borrowing up to $100,000. Since March 2014, the company has had loans of $30,000 outstanding at 12% interest. Interest is payable quarterly on March 31, June 30, September 30, and December 31.