Question

The following transactions occurred in April at Steve’s Cabinets, a custom cabinet firm:

1. Purchased $25,500 of materials on account.

2. Issued $1,750 of supplies from the materials inventory.

3. Purchased $13,100 of materials on account.

4. Paid for the materials purchased in transaction (1) using cash.

5. Issued $15,500 in direct materials to the production department.

6. Incurred direct labor costs of $29,500, which were credited to Wages Payable.

7. Paid $23,100 cash for utilities, power, equipment maintenance, and other miscellaneous items for the manufacturing plant.

8. Applied overhead on the basis of 130 percent of $29,500 direct labor costs.

9. Recognized depreciation on manufacturing property, plant, and equipment of $11,900.

The following balances appeared in the accounts of Steve’s Cabinets for April:

	Beginning			Ending
Materials Inventory	$	32,490			?
Work-in-Process Inventory		8,500			?
Finished Goods Inventory		35,100		$	29,590
Cost of Goods Sold					55,530

b. Prepare T-accounts to show the flow of costs during the period from Materials Inventory through Cost of Goods Sold.

Material Inventory

Work-in-process

Manufacturing Overhead Control

Applied overhead

Accounts payable

Cash

Wages payable

Accumulated Depreciation- Property, Plant, and Equipment

Finished Goods Inventory

Cost of goods sold

Answer 1

b.

Material Inventory					Work in Process					Manufacturing Overhead Control
Beg. Bal.	32490				Beg. Bal.	8500				2	1750
1	25500	1750	2		5	15500				7	23100
3	13100	15500	5		6	29500				9	11900
End. Bal.	53840				8	38350	50020
					End. Bal.	41830
Applied Overhead					Accounts Payable					Cash
		38350	8		4	25500	25500	1				25500	4
							13100	3				23100	7
Wages Payable					Accumulated Depreciation					Finished Goods Inventory
		29500	6				11900	9		Beg. Bal.	35100
											50020	55530
End. Bal.		29500			End. Bal.		11900			End. Bal.	29590
Cost of Goods Sold
	55530
End. Bal.	55530