Zippo Co. manufacturers its products in a continuous process involving two depar

Question

Zippo Co. manufacturers its products in a continuous process involving two departments, Machining and Assembly. Prepare journal entries to record the following transactions related to production during June: (a) (b) Materials purchased on account, $200,000 Materials requisitioned by: Machining, $82,000 direct and $5,000 indirect materials; Assembly, $2,900 indirect materials (c) Direct labor used by Machining, $30,000; Assembly, $47,000 (d) Depreciation expenses: Machining, $6,500; Assembly, $2,300 (e Factory overhead applied: Machining, $8,700; Assembly, $12,200 (f Machining Department transferred S69,300 to Assembly Department; Assembly Department transferred $65,400 to finished goods Sold goods on account, $80,000; cost of goods sold, $60,000 (g)

Explanation / Answer

Journal Entries Accounting titles & Explanations Debit Credit a) Raw materials inventory 200,000 Accounts payable 200,000 b) Work in process inventory-Machining 82,000 Factory overhead-Machining 5,000 Factory overhead-Assembly 2,900 Raw materials inventory 89,900 c) Work In process - maching 30,000 work in process- Assembly 47,000 Faactory wages payable 77,000 d) Facory overhed -machining 6,500 Facory overhed -Assembly 2,300 Accumulated depreciatio 8,800 e) Work In process - maching 8,700 work in process- Assembly 12,200 Facory overhed -machining 20,900 Facory overhed -Assembly f) Work in process -Assembly 69,300 Work in process-Machining 69,300 Finished goods 65,400 Work in process -Assembly 65,400 g) Account receivable 80,000 Sales 80,000 cost of goods sold 60,000 Finished goods 60,000 WIP-Machining WIP-Assembly b) 82,000 69,300 f) c) 47,000 65,400 f) c) 30,000 e) 12,200 e) 8,700 end bal 51,400 End bal 6,200 Finished goods FOH-Machining f) 65,400 60,000 g) b) 5,000 8,700 e) d) 6,500 End bal 5,400 end bal 2,800 FOH-Assembly b) 2,900 12,200 e) d) 2,300 end bal 7000 Foh-Machining under applied by 2,800 FOH-Assembly over applied by 7,000

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