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EA12.
LO 4.7During the month, Job AB2 used specialized machinery for 450 hours and incurred $500 in utilities on account, $300 in factory depreciation expense, and $100 in property tax on the factory. Prepare journal entries for the following:

Record the expenses incurred.
Record the allocation of overhead at the predetermined rate of $1.50 per machine hour.

Respuesta :

Answer:

The Journal entries are as follows:

(i) Manufacturing Overheads Account Dr. $900

To Accumulated Depreciation                             $300

To Cash account                                                   $100

To Utilities payable                                                $500

(To record the expenses incurred)

(ii) Work in process inventory A/c ($1.50 × 450) Dr. $675

To Manufacturing Overhead                                               $675

(To record the allocation of overhead at the predetermined rate of $1.50 per machine hour)

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