Question

Process Cost Journal Entries

In July, the cost of materials transferred into the Rolling Department from the Casting Department of Oak Ridge Steel Company is $503,300. The conversion cost for the period in the Rolling Department is $114,300 ($65,300 factory overhead applied and $49,000 direct labor). The total cost transferred to Finished Goods for the period was $530,000. The Rolling Department had a beginning inventory of $23,800.

a1. Journalize the cost of transferred-in materials.

a2. Journalize the conversion costs. If an amount box does not require an entry, leave it blank.

a3. Journalize the costs transferred out to Finished Goods.

b. Determine the balance of Work in Process—Rolling at the end of the period.
$

Answer 1

Oak Ridge Steel Company
Journal entries
Event	General Journal	Debit	Credit
A1	Work in progress inventory - Rolling Department	503,300
	Work in progress inventory - Casting Department		503,300
	(To record cost transferred into the Rolling Department from the Casting Department.)
A2	Work in progress inventory - Rolling Department	114,300
	Factory overhead		65,300
	Wages payable (if unpaid for Direct labor)		49,000
	(To record cost transferred into the Rolling Department from the Casting Department.)
A3	Finished Goods inventory	530,000
	Work in progress inventory - Rolling Department		530,000
	(To record cost transferred into the Rolling Department from the Casting Department.)
Beginning work in progress			23,800
Add: cost transferred			503,300
Add: Conversion costs			114,300
Less: transfer to Finished Goods inventory			(530,000)
Ending balance of Work in Process—Rolling at the end of the period			111,400