Mertz Company employs a job cost system. As of January 1, 2019,its records showed the following inventory balances:
| Materials | $31,500 |
| Work in process | 56,500 |
| Finished goods (30,000 units @ $3) | 90,000 |
| |
The work in process inventory consisted of two jobs:
| Direct | Direct | Manufacturing |
Job No. | Materials | Labor | Overhead | Total |
378 | $7,000 | $12,000 | $ 6,000 | $25,000 |
379 | 9,000 | 15,000 | 7,500 | 31,500 |
| $16,000 | $27,000 | $13,500 | $56,500 |
| | | | |
Summarized below are the production and sales data for the companyfor 2019:
1. Materials purchased $95,000
2. Materials requisitioned: directmaterials for Job No. 378, $16,000; for Job No. 379, $32,000; andJob No. 380, $36,000; supplies (indirect materials) requisitioned,$4,500.
3. Factory payroll distributed:direct labor to Job No. 378, $30,000; to Job No. 379, $45,000; andto Job No.380, $60,000; indirect labor, $15,000
4. Manufacturing overhead is assignedto work in process at $0.50 per dollar of direct labor (the samerate as in 2018)
5. Job Nos. 378 and 379 werecompleted
6. Factory indirect costs (other thanindirect labor and indirect materials); depreciation, $7,000; heat,light, and power, $3,000; and miscellaneous, $5,000.
7. Sales for the year amounted to$320,000; cost of goods sold, $197,000.
Required:
Use T-accounts to illustrate the journal entries for the abovesummarized transactions.
