Need Help Journalizing these Entries for Process Cost System: Cincinnati Soap Co

Question

Need Help Journalizing these Entries for Process Cost System:

Cincinnati Soap Company manufactures powdered detergent. Phosphate is placed in process in the Making Department, where it is turned into granules. The output of Making is transferred to the Packing Department, where the packaging is added at the beginning of the process. On July 1, Cincinnati Soap Company had the following inventories:

Departmental accounts are maintained for factory overhead, which both have zero balances on July 1.

Manufacturing operations for July are summarized as follows:

(D).Depreciation charged on fixed assets: (3 Entries Required)

Making Department$5,810

  Packing Department4,800

(E).Expired prepaid factory insurance   Making Department $1,100 (3 Entries Required)

  Packing Department $440

(F).Applied factory overhead   Making Department $15,180 (4 Entries Required)

Packing Department $16,770

(G).Production costs transferred from Making Department to Packing Department $91,780 (2 entries Required)

(H).Production costs transferred from Packing Department to Finished Goods$144,450 (2 entries Required)

(I).Cost of goods sold during the period $144,980 (2 entries Required)

Finished Goods $5,410 Work in Process—Making 2,100 Work in Process—Packing 2,740 Materials 1,190

Explanation / Answer

Journal Entries:

S.No.

Accounts / Explanation

Debit

Credit

D

Factory Overhead - Making Department

$          5,810

Factory Overhead - Packing Department

$          4,800

Accumulated Depreciation

$        10,610

(Being depreciation charged on Factory Assets)

E

Factory Overhead - Making Department

$          1,100

Factory Overhead - Packing Department

$              440

Prepaid Insurance

$          1,540

(Being insurance expense recorded )

F

Work in Process- Making Department

$        15,180

Work in Process- Packing Department

$        16,770

Factory Overhead - Making Department

$        15,180

Factory Overhead - Packing Department

$        16,770

(Being overhead applied to production)

G

Work in Process- Packing Department

$        91,780

Work in Process- Making Department

$        91,780

(Being Production costs transferred from Making Department to Packing Department)

H

Finished Goods Inventory

$     144,450

Work in Process- Packing Department

$     144,450

(Being Production costs transferred from Packing Department to Finished Goods)

I

Cost of Goods sold

$     144,980

Finished Goods Inventory

$     144,980

(Being goods sold)

Journal Entries:

S.No.

Accounts / Explanation

Debit

Credit

D

Factory Overhead - Making Department

$          5,810

Factory Overhead - Packing Department

$          4,800

Accumulated Depreciation

$        10,610

(Being depreciation charged on Factory Assets)

E

Factory Overhead - Making Department

$          1,100

Factory Overhead - Packing Department

$              440

Prepaid Insurance

$          1,540

(Being insurance expense recorded )

F

Work in Process- Making Department

$        15,180

Work in Process- Packing Department

$        16,770

Factory Overhead - Making Department

$        15,180

Factory Overhead - Packing Department

$        16,770

(Being overhead applied to production)

G

Work in Process- Packing Department

$        91,780

Work in Process- Making Department

$        91,780

(Being Production costs transferred from Making Department to Packing Department)

H

Finished Goods Inventory

$     144,450

Work in Process- Packing Department

$     144,450

(Being Production costs transferred from Packing Department to Finished Goods)

I

Cost of Goods sold

$     144,980

Finished Goods Inventory

$     144,980

(Being goods sold)

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