Entries for Costs in a Job Order Cost System
Royal Technology Company uses a job order cost system. The following data summarize the operations related to production for March:

a. Materials purchased on account, $770,000.
b. Materials requisitioned, $680,000, of which $75,800 was for general factory use.
c. Factory labor used, $756,000, of which $182,000 was indirect.
d. Other costs incurred on account for factory overhead, $245,000; selling expenses, $171,500; and administrative expenses, $110,600.
e. Prepaid expenses expired for factory overhead were $24,500; for selling expenses, $28,420; and for administrative expenses, $16,660.
f. Depreciation of factory equipment was $49,500; of office equipment, $61,800; and of office building, $14,900.
g. Factory overhead costs applied to jobs, $568,500.
h. Jobs completed, $1,500,000.
k. Cost of goods sold, $1,375,000.

Required:
Journalize the entries to record the summarized operations.

a.

Materials $770,000 (debit)

Accounts Payable $770,000 (credit)

b.

Work in Process: Direct $604,200  (debit)

Work in Process: Indirect $75,800 (debit)

Materials $680,000 (credit)

c.

Work in Process: Direct $574,200  (debit)

Work in Process: Indirect $182,000 (debit)

Salaries and Wages Payable $756,000 (credit)

d.

Work in Process $245,000 (debit)

Selling Expenses $171,500 (debit)

Payable $416,500 (credit)

e.

Work in Process : Overheads  $24,500 (debit)

Selling Expenses $28,420 (debit)

Administrative Expenses $16,660 (debit)

Cash (credit)

f.

Work in Process : Depreciation : factory equipment $49,500 (debit)

Depreciation : office equipment $61,800 (debit)

Depreciation : office building $14,900 (debit)

Accumulated Depreciation : factory equipment $49,500 (credit)

Accumulated Depreciation : office equipment $61,800 (credit)

Accumulated Depreciation : office building $14,900 (credit)

g.

Work in Process $568,500 (debit)

Overheads $568,500 (credit)

h.

Finished Goods $1,500,000 (debit)

Work in Process $1,500,000 (credit)

k.

Cost of goods sold, $1,375,000 (debit)

Cost of Goods Manufactured $1,375,000  (credit)

Explanation:

Prepare the Journals as appropriate in Work In Process Account.

Completed Goods are transferred to Finished goods Inventory

Cost of Sales comes from Cost of Goods Manufactured.

you have to put the parentheses like this:

in fact, you have to perform the operation inside parentheses first, and then proceed in order: