Chapter 17 PR 17-1B PR.17-01B.ALGO Hide or show questions Progress:1/1 items eBo
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Chapter 17 PR 17-1B
PR.17-01B.ALGO
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Entries for Process Cost System
Preston & Grover Soap Company manufactures powdered detergent. Phosphate is placed in process in the Making Department, where it is turned into granulars. The output of Making is transferred to the Packing Department, where packaging is added at the beginning of the process. On July 1, Preston & Grover 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:
Required:
1. Journalize the entries to record the operations, identifying each entry by letter. For a compound transaction, if an amount box does not require an entry, leave it blank.
2. Compute the July 31 balances of the inventory accounts.
3. Compute the July 31 balances of the factory overhead accounts. If required, use the minus sign to indicate a credit balance.
Finished Goods $19,190 Work in Process—Making 7,460 Work in Process—Packing 9,720 Materials 4,210Explanation / Answer
Item Account Debit Credit a. Materials 238,990 Accounts payable 238,990 b. work in process-Making Deptt 157,870 work in process-pcking Deptt 54,910 Factory overhead -making Deptt 6,180 Factory overhead -packing Deptt 2,220 Materials 221,180 c. work in process-Making Deptt 112,790 work in process-pcking Deptt 76,130 Factory overhead -making Deptt 21,840 Factory overhead -packing Deptt 39,160 Wages payable 249,920 d. Factory overhead -making Deptt 20,590 Factory overhead -packing Deptt 17,000 Accumulated Depreciation 37,590 e Factory overhead -making Deptt 3,900 Factory overhead -packing Deptt 1,560 prepaid insurance 5,460 f. work in process-Making Deptt 53,820 work in process-pcking Deptt 59,470 Factory overhead -making Deptt 53,820 Factory overhead -packing Deptt 59,470 g. work in process-packing department 325,420 work in process-making department 325,420 h. finished goods 512,150 work in process-packing department 512,150 i. cost of goods sold 514,020 finished goods 514,020 2) materials 22,020 work in process -Making Department 6,520 work in process-Packing Department 13,500 finished goods 17,320 t-Accounts materials opening 4,210 Requistioned 221,180 purchases 238,990 end bal 22,020 work in process-making deptt opening 7,460 DM 157,870 trfg -packing deptt 325,420 DL 112,790 OH applied 53,820 end bal 6,520 work in process-pcking deptt opening 9,720 trfd making 325,420 DM 54,910 finished goods 512,150 DL 76,130 OH applied 59,470 end bal 13,500 finished goods opening 19,190 cost of goods sold 514,020 WIP-packing 512,150 end bal 17,320 3) Factory overhea-making department 1,310 Credit Factory overhead -packing department 470 Debit Factory overhead-making department indirect mt 6,180 WIP 53,820 ind lab 21,840 dep 20,590 prepaid 3,900 end bal 1,310 Factory overhead-packing department indirect mt 2,220 WIP 59,470 ind lab 39,160 dep 17,000 prepaid 1,560 end bal 470
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