Spacecraft Corporation'shas its general office in Philadelphia, Pennsylvania, and its factories in nearby Trenton, New Jersey, and Pottstown, Pennsylvania. A separate set of records is kept at the general office and at the factories.
On January 1 the factory books showed the following:
Trenton Pottstown
Materials $25,000 $24,000
Work in Process 13,500 15,000
Finished Goods 9,000 10,000
General Ledger $47,500 $49,000
Total $47,500 $47,500 $49,000 $49,000
The following transactions were completed during the month
Trenton Pottstown
(a) Materials purchases $29,000 $26,000
(b) Materials requisitions
Direct 35,000 32,000
Indirect 6,000 4000
(c) Return to suppliers 400 550
(d) Payments to vendors (-2% dis) 30,000 25000
(e) Payrolls for the month
Direct labor ($3 per hour) 15,000 1 1,400
Indirect labor 3,500 2,900
Sales salaries $2,800
Office salaries 2,300
(Deduct 6% for FICA tax and 10% for federal income tax.)
(Liability for the payrolls and payroll taxes is kept on the home office books.)
(f) Workers are paid, and employer's payroll taxes are recorded. The state unemployment insurance rate is 2%, the federal unemployment insurance rate is ,5%, and employer FICA tax is 6%.
(g) Sundry factory overhead expenses $17,000 $15,000
(h) Factory overhead applied to production at $5 per direct labor hour.
(i) Goods completed amounted to 80% of the total cost in the work in process accounts.
(j) Finished goods amounting to $114,000 were shipped to customers — $65,000
from the Trenton plant and $49,000 from the Pottstown plant. (A gross profit of 25% of the sales price is made on these shipments.)
Trenton Pottstown
Materials $25,000 $24,000
Work in Process 13,500 15,000
Finished Goods 9,000 10,000
General Ledger $47,500 $49,000
Total $47,500 $47,500 $49,000 $49,000
The following transactions were completed during the month
Trenton Pottstown
(a) Materials purchases $29,000 $26,000
(b) Materials requisitions
Direct 35,000 32,000
Indirect 6,000 4000
(c) Return to suppliers 400 550
(d) Payments to vendors (-2% dis) 30,000 25000
(e) Payrolls for the month
Direct labor ($3 per hour) 15,000 1 1,400
Indirect labor 3,500 2,900
Sales salaries $2,800
Office salaries 2,300
(Deduct 6% for FICA tax and 10% for federal income tax.)
(Liability for the payrolls and payroll taxes is kept on the home office books.)
(f) Workers are paid, and employer's payroll taxes are recorded. The state unemployment insurance rate is 2%, the federal unemployment insurance rate is ,5%, and employer FICA tax is 6%.
(g) Sundry factory overhead expenses $17,000 $15,000
(h) Factory overhead applied to production at $5 per direct labor hour.
(i) Goods completed amounted to 80% of the total cost in the work in process accounts.
(j) Finished goods amounting to $114,000 were shipped to customers — $65,000
from the Trenton plant and $49,000 from the Pottstown plant. (A gross profit of 25% of the sales price is made on these shipments.)
Required: Using three parallel vertical columns headed General Office, Trenton Plant, and Pottstown Plant, prepare entries in journal form to record the January transactions. Use one work in process account for each plant.
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