SOLUTIONS: 2510 C

ADMS 2510.3.0
Section C: Thursday 4-7: ACW 006:
Mid-Term Exam #1
One hour allowed: there are three equally weighted questions: answer them all.

Question 1:
You are given the following list of cost and sales data for the Tiny Co for the year to 31st December 2013. Sales revenue: | $900,000 | Purchase of raw materials | $200,000 | Raw materials inventory at 1st January 2013 | $ 50,000 | Raw materials inventory at 31st December 2013 | $ 25,000 | Work-in-process inventory at 1st January 2013 | $ 10,000 | Work-in-process inventory at 31st December 2013 | $ 20,000 | Finished goods inventory at 1st January 2013 | $ 75,000 | Finished goods inventory at 31st December 2013 | $100,000 | Marketing and distribution expense | $100,000 | Administrative and office expense | $ 40,000 | Direct labour | $175,000 | Factory depreciation | $ 20,000 | Factory maintenance | $ 10,000 | Factory indirect labour | $ 15,000 | Factory insurance | $ 55,000 |

Required:
1.1: show the “T” account for work-in-process (5 marks). Work-In-Process | Debit | | Credit | Work-in-process inventory at 1st January 2013 | $ 10,000 | | | Raw materials used: ($50,000 + $200,000 - $25,000) | $225,000 | Transferred to finished goods (plug) | $490,000 | Direct labour | $175,000 | | | Overhead incurred: ($20,000 + $10,000 + $15,000 + $55,000) | $100,000 | Work-in-process inventory at 31st December 2013 | $ 20,000 | Total | $510,000 | | |

1.2: show the journal entry to transfer completed product out of work-in-process (5 marks). Debit Credit
Finished goods inventory: $490,000 Work-in-process inventory $490,000

Question 2:
Barrie Inc. uses a job-order cost system. Only 3 jobs were worked on during November and December, Jobs 25, 26 and 27. The costs charged to each job were as follows: Details | Job