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Entries for Process Cost System Preston & Grover Soap Company manufactures powdered detergent. Phosphate is placed...

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:

Finished Goods $30,010
Work in Process—Making 11,660
Work in Process—Packing 15,200
Materials 6,590

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

Manufacturing operations for July are summarized as follows:

a. Materials purchased on account $373,810
b. Materials requisitioned for use:
Phosphate—Making Department $246,930
Packaging—Packing Department 85,890
Indirect materials—Making Department 9,660
Indirect materials—Packing Department 3,460
c. Labor used:
Direct labor—Making Department $176,410
Direct labor—Packing Department 119,070
Indirect labor—Making Department 34,160
Indirect labor—Packing Department 61,240
d. Depreciation charged on fixed assets:
Making Department $32,210
Packing Department 26,600
e. Expired prepaid factory insurance:
Making Department $6,100
Packing Department 2,440
f. Applied factory overhead:
Making Department $84,180
Packing Department 93,010
g. Production costs transferred from Making Department to Packing Department $508,980
h. Production costs transferred from Packing Department to Finished Goods $801,050
i. Cost of goods sold during the period $803,980

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.

Item Account Debit Credit
a.
b.
c.
d.
e.
f.
g.
h.
i.

2. Compute the July 31 balances of the inventory accounts.

Materials $
Work in Process—Making Department $
Work in Process—Packing Department $
Finished Goods $

3. Compute the July 31 balances of the factory overhead accounts.

Factory Overhead—Making Department $
Factory Overhead—Packing Department $

Solutions

Expert Solution

1) Journal entries:
Date Account titles and Explanations Debit Credit
1-Jul Materials 373,810
Accounts payable 373,810
(materials bought on account)
2-Jul WIP Making department 246,930
WIP Packing department 85,890
Factory OH - Making department 9,660
Factory OH - Packing department 3,460
Materials 345,940
(materials issued for production)
31-Jul WIP Making department 176,410
WIP Packing department 119,070
Factory OH - Making department 34,160
Factory OH - Packing department 61,240
Wages payable 390,880
(labor cost incurred)
31-Jul Factory OH - Making department 32,210
Factory OH - Packing department 26,600
Accumulated depreciation-Factory 58,810
(depreciation for the month)
31-Jul Factory OH - Making department 6,100
Factory OH - Packing department 2,440
Prepaid insurance 8,540
(Expired insurance)
31-Jul WIP Making department 84,180
WIP Packing department 93,010
Factory OH - Making department 84,180
Factory OH - Packing department 93,010
(OH applied to production)
31-Jul WIP Packing department 508,980
WIP Making department 508,980
(transfer of production)
31-Jul Finished goods 801,050
WIP Packing department 801,050
(finished goods transferred)
31-Jul Cost of goods sold 803,980
Finished goods 803,980
(cost of goods sold accounted)
2) July 31, Inventory balances:
Materials WIP WIP Finished
Making Packing goods
Beginning balance 6,590 11,660 15,200 30,010
Debit 373,810 507,520 806,950 801,050
Credit 345,940 508,980 801,050 803,980
Ending balance 34,460 10,200 21,100 27,080
3) FOH Account balances as on July 31: FOH FOH
Making Packing
Department Department
Beginning balance 0 0
Debit 82,130 93,740
Credit 84,180 93,010
Ending balance -2,050 730

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Entries for Process Cost System Preston & Grover Soap Company manufactures powdered detergent. Phosphate is placed...
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: Finished Goods $21,650 Work in Process—Making 8,410 Work in Process—Packing 10,960 Materials 4,750 Departmental accounts are maintained for factory overhead,...
Entries for Process Cost System Preston & Grover Soap Company manufactures powdered detergent. Phosphate is placed...
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: Finished Goods $29,030 Work in Process—Making 11,280 Work in Process—Packing 14,700 Materials 6,370 Departmental accounts are maintained for factory overhead,...
Entries for Process Cost System Preston & Grover Soap Company manufactures powdered detergent. Phosphate is placed...
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: Finished Goods $29,270 Work in Process—Making 11,380 Work in Process—Packing 14,830 Materials 6,430 Departmental accounts are maintained for factory overhead,...
Entries for Process Cost System Preston & Grover Soap Company manufactures powdered detergent. Phosphate is placed...
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: Finished Goods$11,070 Work in Process—Making4,300 Work in Process—Packing5,610 Materials2,430 Departmental accounts are maintained for factory overhead, which both have zero...
Entries for Process Cost System Preston & Grover Soap Company manufactures powdered detergent. Phosphate is placed...
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: Finished Goods $27,310 Work in Process—Making 10,610 Work in Process—Packing 13,830 Materials 5,990 Departmental accounts are maintained for factory overhead,...
Entries for Process Cost System Preston & Grover Soap Company manufactures powdered detergent. Phosphate is placed...
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: Finished Goods $4,920 Work in Process—Making 1,910 Work in Process—Packing 2,490 Materials 1,080 Departmental accounts are maintained for factory overhead,...
Entries for Process Cost System Preston & Grover Soap Company manufactures powdered detergent. Phosphate is placed...
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: Finished Goods $11,440 Work in Process—Making 4,450 Work in Process—Packing 5,790 Materials 2,510 Departmental accounts are maintained for factory overhead,...
Entries for Process Cost System Preston & Grover Soap Company manufactures powdered detergent. Phosphate is placed...
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: Finished Goods $27,800 Work in Process—Making 10,800 Work in Process—Packing 14,080 Materials 6,100 Departmental accounts are maintained for factory overhead,...
Entries for Process Cost System Preston & Grover Soap Company manufactures powdered detergent. Phosphate is placed...
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: Finished Goods $19,070 Work in Process—Making 7,410 Work in Process—Packing 9,660 Materials 4,190 Departmental accounts are maintained for factory overhead,...
Entries for Process Cost System Preston & Grover Soap Company manufactures powdered detergent. Phosphate is placed...
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: Finished Goods $7,010 Work in Process—Making 2,720 Work in Process—Packing 3,550 Materials 1,540 Departmental accounts are maintained for factory overhead,...
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