Visual Company produces gadgets for the coveted small appliance market. The following data reflect activity for the year 2017: Visual Co. uses a normal-costing system and allocates overhead to work in process at a rate of 3.10perdirectmanufacturinglabordollar.Indirectmaterialsareinsignificantsothereisnoinventoryaccountforindirectmaterials.Required:1.Preparejournalentriestorecordthetransactionsfor2017includinganentrytocloseoutover−orunderallocatedoverheadtocostofgoodssold.Foreachjournalentryindicatethesourcedocumentthatwouldbeusedtoauthorizeeachentry.Alsonotewhichsubsidiaryledger,ifany,shouldbereferencedasbackupfortheentry.2.PostthejournalentriestoT−accountsforalloftheinventories,CostofGoodsSold,theManufacturingOverheadControlAccount,andtheManufacturingOverheadAllocatedAccount.
Costs incurred:Purchases of direct materials (net) on creditDirect manufacturing labor costIndirect laborDepreciation, factory equipmentDepreciation, office equipmentMaintenance, factory equipmentMiscellaneous factory overheadRent, factory buildingInventories: Work in processFinished goods $ 121.00087.00054.40053.0007.70046.0009.10099.000 January 1. 20176.50060.000December 31. 201726.00031.000
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