Easy Decorating uses a job order costing system to collect the costs of its interior decorating business

E2-13 Easy Decorating uses a job order costing system to collect the costs of its interior decorating business. Each client's consultation is treated as a separate job. Overhead is applied to each job based on the number of decorator hours incurred. Listed below are data for the current year.

Budgeted overhead $960,000
Actual overhead $982,800
Budgeted decorator hours 40,000
Actual decorator hours 40,500
The company uses Operating Overhead in place of Manufacturing Overhead.

Required:
a) Compute the predetermined overhead rate.
b) Prepare the entry to apply the overhead for the year.
c) Determine whether the overhead was under- or overapplied and by how much.

Click here for the solution: Easy Decorating uses a job order costing system to collect the costs of its interior decorating business

Selected transactions for D. Reyes, Inc., an interior decorating firm, in its first month of business, are as follows

E2-2 Selected transactions for D. Reyes, Inc., an interior decorating firm, in its first month of business, are as follows.

Jan. 2 Invested $10,000 cash in the business in exchange for common stock.
3 Purchased used car for $4,000 cash for use in business.
9 Purchased supplies on account for $500.
11 Billed customers $1,800 for services performed.
16 Paid $200 cash for advertising.
20 Received $700 cash from customers billed on January 11.
23 Paid creditor $300 cash on balance owed.
28 Declared and paid a $1,000 cash dividend.

Instructions
For each transaction indicate the following.
(a) The basic type of account debited and credited (asset, liability, stockholders’ equity).
(b) The specific account debited and credited (cash, rent expense, service revenue, etc.).
(c) Whether the specific account is increased or decreased.
(d) The normal balance of the specific account.

Post journal entries to standard form of account.

Use the following format, in which the January 2 transaction is given as an example.
Account Debited Account Credited
(a) (b) (c) (d) (a) (b) (c) (d)
Basic Specific Normal Basic Specific Normal
Date Type Account Effect Balance Type Account Effect Balance
Jan. 2 Asset Cash Increase Debit Stockholders' Stock Common Increase Credit

Click here for the solution: Selected transactions for D. Reyes, Inc., an interior decorating firm, in its first month of business, are as follows

On April 1, 2012, Kathleen Alvarez established an interior decorating business, Intrex Designs

Problem 2-3A Journal Entries and Trial Balance

On April 1, 2012, Kathleen Alvarez established an interior decorating business, Intrex Designs. During the month, Kathleen completed the following transactions related to the business:

Apr. 1. Kathleen transferred cash from a personal bank account to an account to be used for the business, $17,000.
2. Paid rent for period of April 2 to end of month, $3,400.
6. Purchased office equipment on account, $10,000.
8. Purchased a used truck for $21,000, paying $2,000 cash and giving a note payable for the remainder.
10. Purchased supplies for cash, $1,800.
12. Received cash for job completed, $13,000.
Apr. 15. Paid annual premiums on property and casualty insurance, $1,800.
23. Recorded jobs completed on account and sent invoices to customers, $9,000.
24. Received an invoice for truck expenses, to be paid in April, $1,000.

Enter the following transactions on Page 2 of the two-column journal.
29. Paid utilities expense, $1,500.
29. Paid miscellaneous expenses, $750.
30. Received cash from customers on account, $7,800.
30. Paid wages of employees, $4,000.
30. Paid creditor a portion of the amount owed for equipment purchased on April 6, $2,500.
30. Withdrew cash for personal use, $2,000.

AND SO ON

Check: 3. Total of Credit Column: $66,500


Click here for the solution: On April 1, 2012, Kathleen Alvarez established an interior decorating business, Intrex Designs