1. The preparation of the journal entries for July transactions and events for Custom Cabinetry are as follows:
a. Direct materials:
Debit Work in Process:
Job 120 $ 2,200
Job 121 $ 6,700
Job 122 $ 3,700
Credit Raw materials $12,600
b. Direct labor used:
Debit Work in Process:
Job 120 $ 2,600
Job 121 $ 4,500
Job 122 $ 2,900
Credit Direct Labor $10,000
c. Overhead applied.
Debit Work in Process:
Job 120 $ 2,210
Job 121 $ 3,825
Job 122 $ 2,465
Credit Manufacturing overhead applied $8,500
d. Sale of Job 120:
Debit Accounts Receivable $23,500
Credit Sales revenue $23,500
- To record the sale of Job 120 on account.
e. Cost of goods sold for Job 120:
Debit Cost of goods sold $22,070
Credit Finished Goods: Job 120 $22,070
2. The computation of the July 31 balances of the Work in Process Inventory and the Finished Goods Inventory accounts are as follows:
Work in Process: Job 122 = $9,065
Finished Goods: Job 121 = $15,025
<h3>What is Job Costing?</h3>
Job Costing is a costing method that ascribes the costs and revenues to jobs. This enables the system to capture the profit or loss generated per job.
<h3>Data and Calculations:</h3>
Balance of Job 120 as of June 30:
Direct materials of $8,400
Direct labor of $3,600
Applied overhead of $3,060
Total cost = $15,060
<u>Cost incurred in July</u>:
Job 120 Job 121 Job 122 Total
Beginning balance $15,060 $15,060
Direct materials used $ 2,200 $ 6,700 $ 3,700 12,600
Direct labor used 2,600 4,500 2,900 10,000
Overhead applied (85%) 2,210 3,825 2,465 8,500
Total costs incurred $22,070 $15,025 $9,065 $46,160
Learn more about job costing at brainly.com/question/24516871
