Paulson Enterprises Uses a Job Costing System

question 15

Essay

Paulson Enterprises uses a job costing system.Record the following transactions in Paulson Enterprises's general journal for the current month:
a)Purchased raw materials on account,$75,000.
b)Requisitioned $44,500 of direct materials and $7,000 of indirect materials for use in production.
c)Factory payroll incurred,$90,000;80% direct labour,20% indirect labour.
d)Recorded depreciation expense factory equipment $12,000,and other manufacturing overhead of $42,100 (credit accounts payable).
e)Allocated manufacturing overhead costs based on 120% of direct labour cost.
f)Cost of completed production for the current month,$142,000.
g)Cost of finished goods sold,$115,000;selling price,$175,000 (all sales on account).

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Definitions:

Operating Costs

Expenses associated with running a business's core operations on a daily basis, excluding the cost of goods sold.

Net Operating Working Capital

Net operating working capital is a financial measure that represents the difference between operating current assets and operating current liabilities.

Tax Liability

The total amount of tax that an individual or a corporate entity owes to a tax authority.

Capital Gains

Capital gains are the profit earned from the sale of an asset, such as stocks, bonds, or real estate, which exceeds the purchase price.