PRODUCT COST

DM Qt
Unit Cost
Unit DM Cost
DL Hrs
Labor Rate / Hr
Unit DL Cost

$
$

10
25.00
250.00

$
$

20
20.00
400.00

Est. OH Cost
Est. Labor Hrs
POHR
Unit OH Cost

$
$
$

500,000.00
200,000
2.50
50.00

Unit Product Cost

700.00

Selling Price

2,100.00

Journal Entries
Dr.
1 Cash
Common Stock

Cr.
2,500,000
2,500,000

2 Raw Material Inventory

Accounts Payable

3 Work In Process
Raw Material Inventory

4 Work In Process
Wages Payable

5 Work In Process
Manufacturing Overhead

6 Finished Goods
Work In Process

7 Accounts Receivable
Sales Revenue

2,750,000
$

2,750,000

2,500,000

4,200,000

525,000

7,000,000

18,900,000

2,500,000

4,200,000

525,000

7,000,000

18,900,000

Cost of goods sold

Finished Goods

8 Manufacturing Overhead
Cash
Accumulated Depreciation

9 Cost of goods sold

Manufacturing Overhead

10 Selling Expenses
Cash

11 Office Expenses
Cash

6,300,000
$

6,300,000

$
$

350,000
200,000

25,000

945,000

100,000

550,000

25,000

945,000

100,000

Cash
2,500,000

Accts Receivable
18,900,000

350,000
945,000
100,000

18,900,000

1,105,000
Accd Depre.

Accts Payable
200,000

2,750,000

200,000
2,750,000

Sales
18,900,000
18,900,000

$
$

Cost of Goods Sold

6,300,000
25,000
6,325,000

Raw Materials Inv.

2,750,000
2,500,000

PERMANENT ACCOUNTS
WIP Inv.
2,500,000
4,200,000
525,000

7,000,000

250,000
225,000

Wages Payable
4,200,000
4,200,000

Common Stock
2,500,000
2,500,000

Selling Expenses
945,000
945,000

TEMPORARY ACCOUNTS
Office Expenses
100,000
100,000

Finished Goods Inv.

7,000,000
6,300,000

Manufacturing OH
550,000
525,000
$
25,000

700,000

Retained earnings

Equipment

Account
Cash
Accounts Receivable
Raw Materials Inventory
Work-In-Process Inventory
Finished Goods Inventory
Acc. Depreciation
Accounts Payable
Wages Payable
Common Stock
Sales
Cost of Goods Sold
Selling Expenses
Office Expenses
TOTAL

Dr.

Cr.
1,105,000
18,900,000
250,000
225,000
700,000
200,000
2,750,000
4,200,000
2,500,000
18,900,000

6,325,000
945,000
100,000
28,550,000 $

28,550,000

Income Statement
For the Year Ended 2013
Sales
Less: Cost of Goods Sold
Gross Margin
Selling Expenses
Office Expenses

18,900,000
6,325,000
12,575,000
945,000
100,000

1,045,000

Net Income

11,530,000

JHJ Bookstore
Statement of Retained Earnings
For the Year Ended 2013
Beginning R/E
Add Net Income
Less Dividends
Ending R/E

$
$

11,530,000
11,530,000

Balance Sheet

As of December 31, 2013

Assets:
Cash
Accounts Receivable
Raw Materials Inventory
Work-In-Process Inventory
Finished Goods Inventory
Acc. Depreciation
Total Assets

$1,105,000
$18,900,000
$250,000
$225,000
$700,000
($200,000)
$20,980,000

Cost of Goods Manufactured Statement

For the Year Ended 2013
Direct Materials:
Raw Materials Inv., Beg.
Add: Purchases of Raw Materials
Less: Raw Materials Inv., End.
Raw Materials used in production
Direct Labor
Applied Manufacturing OH
Total Manufacturing Costs
Add: Beg. WIP
Less: End. WIP
Cost of Goods Manufactured

Cost of Goods Sold Statement

For the Year Ended 2013
Finished Goods Inv. Beg.
Add: Cost of Goods Manufactured
Less: Finished Goods Inv. End.
Unadjusted Cost of Goods Sold
Add: Underapplied OH or Deduct: Oveapplied OH
Adjusted Cost of Goods Sold

Liabilities & Owner's Equity:

Accounts Payable
Wages Payable
Total Liabilities
Common Stock
Retained Earnings
Total Liabilities & Shareholder's Equity

$2,750,000
$4,200,000
$6,950,000
$2,500,000
$11,530,000
$20,980,000

ment

$
$
$
$
$

2,750,000
($250,000)
2,500,000

$
$
$

4,200,000
525,000
7,225,000
(225,000)
7,000,000

$
$
$
$
$
$

7,000,000
(700,000)
6,300,000
25,000
6,325,000