 List accounts related to inventory in a job cost system. Explain what a job report is and why it is needed. Journalize transactions related to inventory in the job cost system. All right, so first we're gonna take a look at a list of accounts and break out the items that we will be working with. Then we'll go through an example to demonstrate this. We have the trial balance. Trial balance is gonna have the debits that are non-bracketed, credits half brackets. Therefore, the debits minus the credits will equal zero. That's showing us that we are in balance. No income at this time. The green accounts are assets. The orange accounts are liabilities. Equity in the light blue, income in the dark blue. Net income is, of course, these accounts down here. We will be focusing in on the inventory type accounts when we are talking about the job cost system. Those accounts, including raw materials that will be going into inventory, work in process, the work that's in process that will be inventory once it's done being in process. At that point, it will then go into finished goods because it's finished. And then we have this overhead. This is this bucket. I'm gonna put it up here in the assets section because it will be an asset at the end of the day. We're gonna put the miscellaneous information that can't be applied specifically to a job here and then apply it to the job based on some type of ratio or estimate. Now, we then have the general ledger account. Obviously, every account has a GL account listed by date. We won't list every account here. We will focus in on the accounts that will be related to inventory, raw materials going into work in process generally, factory overhead, the stuff that will then go into work in process as well once we allocate it out. And the finished goods will then be here. Those are the asset accounts related to inventory that we're gonna focus in on. Remember, work in process, what it's gonna end up consisting of is the inventory, which is gonna be direct materials, direct labor, factory overhead. So when you think of inventory, you always wanna think that if you're a manufacturing company, we're gonna actually do that in the process. It's gonna have direct materials and factory overhead. If we just bought the inventory, you can think of it the same thing is still there, what made the inventory, what's labor overhead and direct materials. That's what's in the inventory. And then we've got the job cost record. So this is gonna list it out by jobs. Remember when we talked about jobs, it's all the jobs are different. So I often think about construction because construction could have very different jobs. And I've worked in construction, but any job that is different in nature, we wanna break out by job so that we can allocate the items to the job. So we have direct material, labor and overhead that we're gonna allocate to the jobs. And you might be thinking, this looks kind of like an invoice. And it is kind of like the items that we would put into an invoice if we were to bill a client for, say, a job. Of course, we would then have to mark it up for what we were gonna get for it, for our time on top of these items with our just the costs. These are just the costs to us not counting up any markup for our revenue. So if you think about this as an invoice, this is the material that could go into an invoice and then we'd have to mark it up. So if we look at our jobs, we got job 14 and then 15 down here for some reason and then 16. And if we add those three jobs up, we got the 41,000, the zero and the 42 adds up to this 83. That of course ties out to the 83 on the trial balance. That of course also ties out to the 83 in the working process. So that will always be the case. We need this to back up the working process in a similar fashion as we need like an accounts receivable subsidiary ledger to back up the accounts receivable account. Why? Because the general ledger doesn't tell us the whole story. It only breaks it out by date. We need to break it out in the case of the receivable by customer. Who owes those money? And we need to break it out in the case of working process by job. Which jobs are making up that amount? Because when we transfer or sell those jobs, we need to know the costs related to that particular job that was sold. All right. So we're gonna go through some transactions and work through these. We got purchase raw materials of 400,000 on account. So if we purchase raw materials on account, then raw materials is gonna go up. So here's the raw materials account, the debit we're gonna make go up with the debit and the accounts payable went up here with a credit. It has a credit balance that went up. Now we're gonna focus in on the raw materials, of course, because that's gonna be our asset account. So now we have the 150 goes up by 400 to the 550. That's what our raw materials is at this point. Of course, accounts payable went up as well. We're not gonna look at the GL account because that's nothing new to us. That's a normal process within our accounting. And if we look at our job cost report, nothing new happened here because this raw materials here is not yet into any particular job. So you can think of it as just a pile on the corner hasn't yet been applied to the job. Therefore it's not in work and process. Therefore it's not gonna be applied to the job until we request it to be applied to the job. So now we're gonna say, okay, now the first thing that happens is we are going to take that raw material and requisition it to the particular jobs. So.