Accounting Question

Problem 15-2A

For the year ended December 31, 2014, the job cost sheets of Cinta Company contained the following data.

Job Number	Explanation	Direct Materials	Direct Labor	Manufacturing Overhead	Total Costs
7640	Balance 1/1	$32,500	$31,200	$37,440	$101,140
	Current year’s costs	39,000	46,800	56,160	141,960
7641	Balance 1/1	14,300	23,400	28,080	65,780
	Current year’s costs	55,900	62,400	74,880	193,180
7642	Current year’s costs	75,400	71,500	85,800	232,700

Other data:

1.		Raw materials inventory totaled $19,500on January 1. During the year, $182,000of raw materials were purchased on account.
2.		Finished goods on January 1 consisted of Job No. 7638 for $113,100and Job No. 7639 for $119,600.
3.		Job No. 7640 and Job No. 7641 were completed during the year.
4.		Job Nos. 7638, 7639, and 7641 were sold on account for $689,000.
5.		Manufacturing overhead incurred on account totaled $156,000.
6.		Other manufacturing overhead consisted of indirect materials $18,200, indirect labor $23,400, and depreciation on factory machinery $10,400.

Prove the agreement of Work in Process Inventory with job cost sheets pertaining to unfinished work. (Hint:Use a single T-account for Work in Process Inventory.) Calculate each of the following, then post each to the T-account: (1) beginning balance, (2) direct materials, (3) direct labor, (4) manufacturing overhead, and (5) completed jobs.

Work in Process Inventory

1/1	Balance
	Direct materials
	Direct labor
	Manufacturing overhead
12/31	Balance

	Completed work

Work in process balance		$

Unfinished jobNo. 7638No. 7639No. 7640No. 7641No. 7642		$

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Prepare the adjusting entry for manufacturing overhead, assuming the balance is allocated entirely to Cost of Goods Sold.(Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Account Titles and Explanation	Debit	Credit

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Determine the gross profit to be reported for 2014.

Gross profit

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