Prepare the Journal Entries to Record the Following Transactions for Viking

question 18

Essay

Prepare the journal entries to record the following transactions for Viking Co. ,a company that produces Viking helmets for sale to tourists.
a.Purchased $80,000 of steel (8,000 tons)in cash.
b.Issued $75,000 of steel (7,500 tons)into production.
c.Paid $15,000 cash in production labor costs.
d.Applied overhead at the predetermined rate of $5 per ton of steel.
e.Incurred $40,000 of actual overhead costs,paid in cash.(Assume any difference between actual and applied overhead costs is adjusted directly to cost of goods sold. )
f.Completed 25,000 helmets.(Approximately $27,500 of inventory remains in process,so the cost of each helmet is approximately $________. )
g.Sold 22,000 helmets at $24.00 per unit.(All proceeds were collected in cash. )
h.Disposed of any over- or under-applied overhead cost.

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Definitions:

Unrealized Pre-Tax Profits

Profits that have been recorded in financial statements but have not yet been subjected to taxation due to non-realization through sales.

Intercompany Sale

A transaction of goods or services that occurs between two entities within the same parent company.

Mark-Up

The amount added to the cost price of goods to cover overhead and profit; a percentage over cost.

Impairment Loss

A decrease in the recoverable amount of an asset below its carrying amount, leading to a reduction in the value recorded on the balance sheet.