For the year ended December 31, 2020, the Job cost sheets of Nevada Co. Contained the following data. Job Number Explanation Direct Direct Labor Manufacturing Total Costs Materials Overhead 71 Balance 1/1 $30.000 $45.000 $35.000 $40.000 Current year’s 35.000 20.000 40.000 20.000 costs 72 Balance 1/1 15.000 30.000 50.000 15.000 Current 50.000 40.000 10.000 50.000 costs 73 Balance 1/1 40.000 10.000 25.000 35.000 Current year’s 20.000 50.000 30.000 45.000 costs year’s Other data:
1. Raw material inventory totaled $20.000 on January 1. During the year, $250.000 of raw materials were purchased.
2. Finished goods on January consisted of Job no. 69 for $80.000 and Job no. 70 for $95.000.
3. Job no.71 and 72 were completed during the year
4. Jobs no. 70 and 72 were sold on account for $600.000
5. Manufacturing overhead incurred on account totaled $120.000
6. Other manufacturing overhead consisted of indirect materials $20.000, indirect labor $25.000 and depreciation on factory machinery $10.000. Instructions: a. Provide a single T account for W.I.P with calculation of 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. b. What is the amount of over or underapplied overhead of the month? Explain! c. Determine the gross profit to be reported in 2020.
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