 I'm going to put it on the bottom of the date right click and paste it one two three I'm going to do the same thing I'm going to add them up so in order to add them up and flip the sign make it a negative number I'm going to say negative of brackets the 30,000 plus the 68,000 plus the 120,000 brackets so all I'm doing is just adding up the 30 to 68 to 120 then making it negative so that's a negative 218,000 if we credit something 218 we're going to have to debit something 218 I'm going to do that with a negative of this number take that number flip the sign you could just type in a positive 218 and what's that debit going to go to and you might say well we paid for labor that's payroll payroll we know that payroll usually if we think about the past problems that we've taken a look at payroll it goes to payroll expense usually but in this case we paid payroll for the youth people's work to make inventory and that's the thing we got to kind of wrap our head around when we start talking about inventory because a lot of people just start to think about things like payroll and utilities as expenses inherently in and of themselves but the only reason their expenses is because we have consumed them in that time period to help us generate revenue in this case we didn't consume the wages to help us generate the sales in this time period we paid for the wages to help us to generate inventory these accounts so we need to debit not an expense in this case but an asset that asset being the inventory more specifically the inventory that's not yet done that being the work in process so work in process has a debit balance we're going to make it go up by doing the same thing to it which in this case would be another debit so I'm going to copy that we're going to put that in c not c 10 right click paste it 123 all right now I'm going to make this a bit smaller we're going to post this to the general ledger so I'm going to make it a little smaller so we could see the general ledger I'm going to scroll over here so that we can see more of the general ledger as well as our journal entry working processes here working processes here on the trial balance fourth account working processes is over here on the general ledger fourth account we're going to scroll down to the next transaction in U10 so U10 equals that 218 that's going to bring this balance up to 651 which we can also see on the trial balance we will then post the cash cash is here first count on the trial balance first count on the gl we are in the credit site r9 equals and we're going to point to that 218 that's a credit cash has a debit balance bringing the amount down to 200 which of course we could see over here as well now we have affected once again the working process area we need to back that up with the cost sheets as well by job and you'll recall that by job we have the 14 15 and 60 broken out in this way so we're going to post this 118 breaking it out into the 30 68 and 120 in accordance with these three jobs so let's scroll all the way over here again to our job cost thing where we have our three jobs those three jobs being 14 15 and 16 as of the uh what is it that's 12 12 we are going to scroll over to the direct materials column now and break it out in accordance to what we were seeing in our data so 30 000 of the payroll is going to this this job and you might think well aren't we we're going to expense it sometime aren't we well yeah when we sell job for 14 or when we complete it and or when we sell the inventory related to what is being made in that job in the form of cost of good sold that's how we'll expense it so then we have that we have 112 over here and in column uh uh a o but also in the direct labor column we're going to put the 68 000 so we're going to increase that job and then we're going to scroll down here to job 16 on 112 and in the direct labor column we will include 120 000 notice that that the payroll is not being allocated uh evenly here obviously in this case we would actually know what where uh each employee worked why because hopefully when we attract when we track the payroll we are recording which jobs these individuals are working on uh when we move to the overhead that will not necessarily that won't be the case and we'll have to figure that out but we can now see that the jobs add up to this 651 that 651 is also seen on the general ledger and is also seen on the trial balance therefore we're looking good they're going to bring it back up in the taskbar to 100% scroll over to the left and see what we have next kind of skip a line we are now on 116 where it says applied factory overhead based on predetermined overhead rate of direct labor all right so here's the thing that usually people get a little bit confused on and that's going to be the overhead so what's going to happen with the overhead is that overhead is going to include a bunch of stuff that we're going to include in there including down here we'll apply this stuff in there later which is the indirect materials uh factory utilities factory rent depreciation on the factory if you work any kind of book problem anything that says basically on the factory if you're working a job cost or process cost then that's part of overhead because these types of things and some of these things again are some things that people just and just have ingrained in their head that they should be an expense for example utility is expense i mean utilities we usually think a lot of people are just going to say i hear utilities that should be a debit to utilities expense but that's not necessarily the case if we're paying the utility bill because it helped us generate revenue in accordance with the matching principle then yes it should be recorded in utility expense at the time we paid it or used it but if we use that utility in order to create an asset such as inventory and in this case then we need to put it in terms of the asset it needs to be included in assets then it needs to be expensed when we sell the inventory in the form of cost of goods sold so for anybody that has kind of ingrained in their head certain types of expenses as always being an expense you got to kind of rethink that and say no i mean why is utilities expended this time it's utilities being paid on the factory and the factory is being used to make inventory the inventory hasn't yet helped us make revenue yet it's an asset therefore that utilities needs to be included up here in inventory now if you think about these things though if we have a warehouse and we're making a bunch of stuff in the warehouse and they're all different in size then we can't really just take these amounts for example like we can't just take these three amounts group them together and divide by in our example three jobs because remember the three jobs are all different in size so i can't just take whatever's in overhead and divide it out by the number of jobs and we also can't apply the utility directly to a job i don't know how much of the lighting of the warehouse we spent on any particular job so then the question is how are we going to allocate utilities to the jobs i know that we need to but we can't do it evenly because the jobs aren't evenly sized and we can't apply it directly to the jobs because we have no way to do so so we're going to arbitrarily do it in some way bigger jobs should get more of the overhead smaller jobs should get less of the overhead how are we going to do that and we're going to use some kind of cost driver to do that we're going to say how do we know if a job is one job is bigger than another job one way we might say we could say well if one job takes more labor hours than another job then that's how we're going to decide how big each job is in relation to each other that's what we're going to do in this example we could also if something is very machine