Summerset Fencing An Algorithmic Practice Set Featuring Job- Order Costing and JIT Inventories 1 st Web- Based Edition Module 2 TRANSACTIONS for JUNE 10 to JUNE 16 Page 1
TRANSACTIONS FOR JUNE 10-16 Did you backup your data files at the end of Module One? It is recommended that you backup your files at the end of each data entry session. If you want to return to a previously saved position and start from the point of your last saved data files, click on Administration, select Files: Restore and Backup, select Restore Backed- up Data Files. Should you restore, it is recommended that you print a copy of the General Journal and a Trial Balance to verify the position of the last save. June 10 The delivery of Job 30 was held up due to a property alignment issue at the delivery site. Job 30 was delivered to the job site, today. Sales invoice SF146 lists the sales price for the job at $12,300.00. The customer paid with a check upon delivery. June 10 Job 31 was delivered to the job site. Sales invoice SF147 lists the sales price for the job at $56,789.00. The customer paid with a certified check upon delivery. June 10 A check was received from Larson Pools, Inc. as full payment of their account. The account balance of $4,280.00 was written off as uncollectible on May 2 of this quarter. Summerset Fencing uses the direct write off method. Customer Number: 11000. Invoice Number: RECOV. Two entries are required. June 10 Material for JOB 32 was purchased from Rapid City Steel, Inc. Rapid City Steel Terms: n/30 Invoice: M5788 Stock No. Item Quantity Cost/Unit Extension B9620 5/8 T Wall Tube.049 980 5.10 4,998.00 S2250 2 x.125 x 20 180 12.25 2,205.00 Total 7,203.00 Page 2
June 11 Sold 6,000 shares of PKL Corporation common stock held as a short- term investment. The stock was purchased for $24,000.00 and is being sold for $4.75 per share, less a sales commission of $480.00. Invoice Number: INVST. June 11 Purchased material for JOB 32 from Yomoto Steel,Inc. Yomoto Steel, Incorporated Terms: 2/10, n/30 Invoice: Y2681 Stock No. Item Quantity Cost/Unit Extension H4000 4 In. Sq. Tubing 50 59.00 2,950.00 G3000 3 In. Sq. Tubing.095 200 52.00 10,400.00 Total 13,350.00 June 12 A check for $20,000.00 was received from Arcade Construction (10400) as an advance payment on a custom fencing job (JOB 33) for Arcade s newest housing development. Advance payments are credited directly to Accounts Receivable (105). The advance payments for any job that is not completed by the end of the accounting period are transferred to the Unearned Revenue account. Invoice Number: ADVAN. June 13 A check was issued for $14,348.00 to Gooden Welding Supply for full payment of invoice G3288 that is due today. Check Number: 30555. Invoice Number: G3288. June 13 Direct materials for JOB 33 were purchased from Ambrosini Steel, Inc. Ambrosini Steel, Incorporated Terms: 1/10, n/30 Invoice: A6102 Stock No. Item Quantity Cost/Unit Extension G3000 3 In. Sq. Tubing 0.095 120 52.00 6,240.00 F2000 2 In. Sq. Tubing 0.095 100 38.50 3,850.00 Total 10,090.00 Page 3
June 14 A check was issued Yomoto Steel as payment in full, plus the discount lost, for Invoice Y2395 of June 2. The payment is 2 days past the discount period. Check Number: 30556. Invoice Number: Y2395. Option 1: (a) Record the discount lost separately, crediting Yomoto s account for the lost discount, and (b) record the payment of the new balance in the Yomoto account. Option 2: Record the discount lost in a compound journal entry to record the payment. This Option is preferred. June 14 A check was issued to Penryn Legal Group as payment of their May 4 invoice. Review your Schedule of Account Receivable. Check Number: 30557. Invoice Number: L3221. Vendor Number: 25850. June 14 Indirect materials of $1,200.00 were purchased from Delta Supply. Invoice Number: DS989. Overhead: INMAT. Vendor Number: 21880. June 14 Record the direct- labor time tickets for Job 32 Date Job Number Time Ticket Hours Rate June 14 JOB 32 TT570 20 $60 June 14 JOB 32 TT571 10 $48 Record the direct- labor time tickets for JOB 33 Date Job Number Time Ticket Hours Rate June 14 JOB 33 TT572 10 $60 June 14 JOB 33 TT573 4 $48 See the June 8 and June 9 entry for direct labor to review recording multiple Time tickets. Page 4
June 15 Record the transfer of JOB 32 from the Raw and In- Process Inventory account to the Cost of Goods Sold account. Look up the total cost balance of JOB 32 in the subsidiary ledger for Raw and In- Process Inventory. Invoice Number: TRANS. June 15 Record accrued office salaries of $2,400.00 for the two- week period ended June 15. Invoice Number: OFSAL. June 15 Record the direct labor of $9,576.00 for the period of June 3 to June 15. Debit Raw and In- Process Inventory (115) and credit Salaries and Wages Payable (209). At the invoice prompt enter DRLAB. You should verify the amount by adding the labor costs for the time period of June 3 to June 15 for JOB 29, JOB 30, JOB 31, JOB 32, and JOB 33. If you do not agree, audit your previous work. Worksheet: Job June Labor 29 30 31 32 33 Total June 15 Record accrued indirect labor of $1,800.00 (factory supervisor and maintenance personnel) for the two- week period ended June 15. Charge the Manufacturing Overhead account. Overhead: INLAB. June 16 Office supplies (account 129) of $850.00 were purchased from Granite Business Supply on credit. Invoice Number: G4545. Vendor Number: 23400. This is the final transaction for the week June 10 to 16. Page 5
Completing the Module: Now that you have completed entering the transactions for the first seven days of the internship program, June 10-16, it is time to check the accuracy of your work. A. When all of the transactions for the period of June 10-16 have been entered, move the pointer to Check Figures and click on Weekly Check Figures. The Correct Totals and Your Totals for selected account balances are shown. Any differences in account balances are notated. Print a copy of the Check Figures for Week Two. If Your Totals match the Correct Totals for the selected accounts, proceed to instruction C. B. If Your Totals do not match the Correct Totals, the errors that must be corrected before you continue. Carefully analyze all of your journal entries for the week, locate the error(s), and make the necessary corrections. When all of your totals match, proceed to instruction C. C. To efficiently complete this analysis and correction procedure, it is recommended that you print a copy of the transactions you have entered. Click on Journals/Ledgers/Statements, select General Journal, then select Second Week and click on Show Portion, select Second Week and Print the General Journal. Be sure to use the error correction procedures outlined at the end of Module 1. D. Click on Journals/Ledgers/Statements, select Subsidiary Ledgers, then select Raw and In- Process Inventory. Print the Job Cost and Status Report. The General Ledger Trial Balance of Raw and In- Process Inventory will have a different balance than the subsidiary ledger of Raw and In- Process Inventory. Why the difference? Hint: Direct Labor and overhead charges made to the Job Sheets have not yet been charged to the Raw and In- Process Inventory account. E. Print the following: 1. Trial Balance for June 16 Click on Journal/Ledgers/Statements, select General Ledger and print the Trial Balance. 2. Click on the Show Ledger Card, and print account 101 (Cash) a. Print the following additional General Ledger accounts. Click on the down arrow key and select the account, click on Show Ledger Card, then click on Print. Page 6
105 Accounts Receivable 115 Raw and In- Process Inventory 185 Manufacturing Overhead 201 Accounts Payable 209 Salaries and Wages Payable 401 Custom Fence and Gate Sales 501 Cost of Goods Sold 601 Office Salaries and Wages Expense 814 Discounts Lost 3. The Schedule of Accounts Receivable Click on Journals/Ledgers/Statements, select Subsidiary Ledgers, then select Accounts Receivable. Click on the Print button and print the schedule. 4. The Individual account information for ALL customers Click on the All Customers button and print the ledger cards for all of the Account Receivable customers. 5. The Schedule of Accounts Payable Click on Journals/Ledgers/Statements, select Subsidiary Ledgers, then select Accounts Payable. Click on the Print button and print the schedule. 6. The Individual account information for ALL creditors/vendors Click on the All Vendors button and print the ledger cards for all of the Accounts Payable vendors. 7. Print Job Cards Click on Journals/Ledgers/Statements, select Subsidiary Ledgers, then select Raw and In- Process Inventory. Click on Job Card, select the job card, click on Show Job Card, then click on Print. Print the following Job Cards: JOB 29 JOB 30 JOB 31 JOB 32 JOB 33 Before exiting the program, BE SURE THAT YOU HAVE BACKED UP YOUR DATA FILES FOR THE COMPLETION OF MODULE TWO (as instructed in module 1). When your Module Two data has been saved, you are ready to exit the program. To exit the program, click on Administration; then click on Return to Home Page. Page 7
PLEASE NOTE: All of the June 16 required documents should be corrected and printed before completing the Mid- Project Evaluation and continuing the journalizing process for Module Three. Complete the Mid- Project Evaluation on the following page as guide to completing the on- line version. Move the pointer to Evaluations, select Mid- Project Evaluation and follow the directions. If your instructor requires the on- line version to be emailed, click on Email after scoring the evaluation and follow the instructions. Page 8
MID- PROJECT EVALUATION SUMMERSET FENCING NAME CLASS DAY AND TIME DATE 1. Does the total of your June 16 Trial Balance match the Trial Balance total shown in the Check Figures for Week 2? A. Yes B. No 2. What was the correct balance of the Cash account at the close of business on June 6? 3. What was the total amount of Custom Fence and Gate Sales that was recorded on June 10 for Job 31? $ $ 4. What was the total amount of the transfer of Job 31? $ 5. What is the book value of the Factory on June 16th? $ 6. What was the balance of the Salaries and Wages Payable account after the entry for direct labor on June 15? 7. Does Summerset Fencing have sufficient cash to meet its current debt? A. Yes B. No 8. Identify by number, the customer who has a credit balance in Accounts Receivable. $ 9. What is the current balance of the Flexible Storage account? 10. How many customers currently have outstanding account balances? 11. On what date is the June 13 invoice from Ambrosini Steel, Inc., due and payable? (Remember that Summerset Fencing takes all discounts) A. June 10 B. June 14 C. June 23 D. July 13 E. None of the above Page 9
MID- PROJECT EVALUATION SUMMERSET FENCING 12. With the Net Method requiring that all discounts offered are taken, on what date is the June 11th invoice from Yomoto Steel due and payable? A. June 17 B. June 21 C. June 30 D. July 30 E. None of the above 13. If the control system in place for handling invoices had been followed, the Yomoto Steel invoice (Y2395) should have been paid by what date? A. June 11 B. June 12 C. June 15 D. July 2 E. None of the above 14. The Yomoto Steel invoice Y2588 was recorded net. If the invoice is paid on June 17, how much will be saved by paying within the discount period? $ 15. What is the balance of the Yomoto Steel, Incorporated account?" $ 16. Are any of the vendor accounts past due? A. Yes B. No 17. From June 3 to 16 there were several purchases of direct materials. What was the net amount of the largest purchase made? 18. How many jobs have been sold since June 3? A. 1 B. 2. C. 3 D. 4 E. 5 19. Identify by number which job has been transferred but is not yet sold? $ Page 10
MID- PROJECT EVALUATION SUMMERSET FENCING 20. Identify by number which job is still in process? 21. What is the total amount of the direct material charged to JOB 30? $ 22. What is the total amount of the direct labor charged to JOB 31? $ 23. What is the total amount of the overhead charged to JOB 32? $ 24. What is the number of direct labor hours at the $60 rate that has been charged to JOB 33? 25. What is the dollar difference between the general ledger balance of Raw and In- Process Inventory and the balance of the job cards shown in the Job Cost and Status Report? 26. What is the total amount of overhead charged to Job 33 since June 3? $ $ 27. What is the gross profit on JOB 30? $ 28. What is the gross profit on JOB 31? $ 29. If Job 32 is sold today, and the markup on the total cost of the job is 150% of total cost, what will be the selling price of Job 32? 30. After all entries have been recorded and posted on June 16, what is the gross profit of Summerset Fencing on that date? $ $ Page 11