The following information applies to the questions displayed below. Li Company p

Question

The following information applies to the questions displayed below. Li Company produces large quantities of a standardized product. The following information is available for its production activities for January Raw materials Beginning inventory Raw materials purchased (on credit) Direct materials used Factory overhead incurred Indirect materials used Indirect labor used Other overhead costs $ 74,500 50,000 155,640 $ 22,000 295,000 (170,500) Indirect materials used (74,500) Total factory overhead incurred 280140 Ending Inventory $ 72,000 Factory payroll Direct labor used actory overhead applied (140% of direct labor cost) $200300 Total factory overhead applied 280140 Indirect labor used 50,000 Total payroll cost (palid in cash) 250,100 Additional information about units and costs of production activitles follows. Costs Beginning goods in process inventory Units Beginning goods in process inventory Started 2500 . 34,000 Direct materials Direct labor Factory overhead $ 2,500 3,100 3,900 Ending goods in process inventory s 9,500 Direct materials added Direct labor added Overhead applied (140% of direct labor) Status of ending goods in process inventory Materials-Percent complete Labor and overheed-Percent complete 80% 65 % 170,500 200,100 280140 Total costs $ 660.240 Ending goods in process inventory $ 79695 21 MacBook Pro

Explanation / Answer

Part 1 Date Account Titles and Explanation Debit Credit Jan.31 Raw Material Inventory $295,000.00 Accounts Payable $295,000.00 Jan.31 Goods in Process Inventory $170,500.00 Raw Material Inventory $170,500.00 Jan.31 Factory Overhead $74,500.00 Raw Material Inventory $74,500.00 Jan.31 Factory Payroll $250,100.00 Cash $250,100.00 Jan.31 Goods in Process Inventory $200,100.00 Factory Payroll $200,100.00 Jan.31 Factory Overhead $50,000.00 Factory Payroll $50,000.00 Jan.31 Factory Overhead $155,640.00 Other accounts $155,640.00 Jan.31 Goods in Process Inventory $280,140.00 Factory Overhead $280,140.00 Jan.31 Finished Goods Inventory $580,545.00 Goods in Process Inventory $580,545.00 Jan.31 Cash $2,200,000.00 Sales (22000 x $100) $2,200,000.00 Jan.31 Cost of good sold $608,390.00 Finished Goods Inventory $608,390.00

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