Seventy percent of Pitkin Corporation's sales are collected in the month of sale, 20% in the month following sale, and 10% in th

Response:

Allocated MOH= $274,320

Clarification:

Providing the following details:

The budgeted factory overhead was $266,400, while the expected machine-hours amounted to 18,500. The actual machine-hours totaled 19,050.

Initially, we must determine the estimated rate for manufacturing overhead. We can then allocate the overhead accordingly.

To find the estimated overhead rate for manufacturing, we should employ the following equation:

Estimated manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Estimated manufacturing overhead rate= 266,400/18,500= $14.4 per machine-hour.

Now we can proceed to allocate the overhead:

Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base

Allocated MOH= 14.4*19,050= $274,320

Answer:

a. Nov 11, 2017

Dr Cash $4,900

Cr Sales $4,900

Nov 30, 2017

Dr Warranty Expense $294

Cr Estimated Warranty Liabilities $294

Dec 9, 2017

Dr Estimated Warranty Liabilities $196

Cr Cash $196

Dec 16, 2017

Dr Cash $14,700

Cr Sales $14,700

Dec 29, 2017

Dr Estimated Warranty Liabilities $392

Cr Cash $392

Dec 31, 2017

Dr Warranty Expense $882

Cr Estimated Warranty Liabilities $882

b. Jan 5, 2018

Dr Cash $9,800

Cr Sales $9,800

Jan 17, 2018

Dr Estimated Warranty Liabilities $462

Cr Cash $462

Dec 31, 2018

Dr Warranty Expense $588

Cr Cash $588

Explanation:

a. Preparation of the journal entries to record the transactions and adjustments for 2017

Nov 11, 2017

Dr Cash $4,900

Cr Sales $4,900

(This records the sale of razors for cash)

Nov 30, 2017

Dr Warranty Expense $294

Cr Estimated Warranty Liabilities $294

($4,900*6%)

(This records the warranty expense)

Dec 9, 2017

Dr Estimated Warranty Liabilities $196

Cr Cash $196

(14 razors*14)

(This represents the replacement of 14 razors)

Dec 16, 2017

Dr Cash $14,700

Cr Sales $14,700

(This records the cash sale of razors)

Dec 29, 2017

Dr Estimated Warranty Liabilities $392

Cr Cash $392

(28 razors*14)

(This represents the replacement of 28 razors)

Dec 31, 2017

Dr Warranty Expense $882

Cr Estimated Warranty Liabilities $882

($14,700*6%)

(This records warranty expense)

b. Preparation of journal entries to reflect the transactions and adjustments for 2018

Jan 5, 2018

Dr Cash $9,800

Cr Sales $9,800

(This records razors sold for cash)

Jan 17, 2018

Dr Estimated Warranty Liabilities $462

Cr Cash $462

(33 razors*14)

(This indicates the replacement of 33 razors)

Dec 31, 2018

Dr Warranty Expense $588

Cr Cash

(6%*$9,800) $588

(This indicates the recording of warranty expense)