1. Flow of Inventory Costs through the accounts: Bob N. DeWaves owns a yacht bui
ID: 2465015 • Letter: 1
Question
1. Flow of Inventory Costs through the accounts:
Bob N. DeWaves owns a yacht building company. Bob had inventories at the beginning and
end of 200X as follows:
January 1, 20XXDecember 31, 20XX
Raw Materials Inventory$45,000$61,000
Work-in-Process Inventory66,00052,000
Finished Goods Inventory64,00061,000
During 20XX, Bob purchased raw materials of $415,000, incurred direct labor costs of $210,000, and applied manufacturing overhead of $296,000 to production (assume that $296,000 was what had gone into MOH). Assume that all the raw material used consisted of direct materials. Prepare T-accounts to show the flow of costs through the company's inventory accounts during 20XX. Hint: See pages 10-4 and 10-5.
2. Flow of Inventory Costs through the accounts:
Chris P. Critters Manufacturing produces custom barbeque grills. Prepare t-accounts for Cash,
Raw Materials Inventory, Work in Process Inventory, Finished Goods Inventory, Cost of Goods
Sold, Manufacturing Overhead, Sales, Selling and Administrative Expenses and Owner's Equity.
Record the effects of the events in the t-accounts. Show the event letter next to each entry (to
help you follow the events). Prepare an income statement and balance sheet for Chris's
company. You must complete all parts to receive credit for the problem.
a.Chris began the year with $3,450 worth of raw materials, $8,400 worth of work in process, $9,500 worth of finished goods, $18,320 cash and $39,670 in Owner's Equity.
b.Chris purchases steel for $3,500 cash, and welding supplies for $600 cash (included were both direct materials and indirect materials)
c.Chris issued $2,000 of steel from the storeroom to be used in producing grills.
d.Chris issued $140 of welding supply (indirect) from the storeroom to be used in producing grills.
e.Chris paid their welders $1,800 cash for work performed in the current period.
f.Chris paid their janitor $200 cash for work performed in the current period.
g.Chris paid cash for rent on welding equipment related to manufacturing grills in the sum of $400.
h.Chris paid cash for advertising expenses of $700.
i.Chris estimated that $800 worth of overhead cost should be applied to the grills in work-in-process.
j.Chris completed grills that had cost $9,400 to produce. These grills were not sold immediately.
k.Chris sold $16,000 worth of grills for $21,400 Cash.
Explanation / Answer
1.
Raw materials Inventory Opening balance 45000 Purchases 415000 Issued io production(45000+415000-61000) 399000 Closing balance 61000 460000 460000Related Questions
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