Question

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	$7,500
Work in Process—Making	2,920
Work in Process—Packing	3,800
Materials	1,650

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		$93,450
b.	Materials requisitioned for use
		Phosphate—Making Department	$61,730
		Packaging—Packing Department	21,470
		Indirect materials—Making Department	2,420
		Indirect materials—Packing Department	870
c.	Labor used
		Direct labor—Making Department	$44,100
		Direct labor—Packing Department	29,770
		Indirect labor—Making Department	8,540
		Indirect labor—Packing Department	15,310
d.	Depreciation charged on fixed assets
		Making Department	$8,050
		Packing Department	6,650
e.	Expired prepaid factory insurance
		Making Department	$1,530
		Packing Department	610
f.	Applied factory overhead
		Making Department	$21,050
		Packing Department	23,250
g.	Production costs transferred from Making Department to Packing Department		$127,250
h.	Production costs transferred from Packing Department to Finished Goods		$200,260
i.	Cost of goods sold during the period		$201,000

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.	Materials
	Accounts Payable
b.	Work in Process-Making Department
	Work in Process-Packing Department
	Factory Overhead-Making Department
	Factory Overhead-Packing Department
	Materials
c.	Work in Process-Making Department
	Work in Process-Packing Department
	Factory Overhead-Making Department
	Factory Overhead-Packing Department
	Wages Payable
d.	Factory Overhead-Making Department
	Factory Overhead-Packing Department
	Accumulated Depreciation
e.	Factory Overhead-Making Department
	Factory Overhead-Packing Department
	Prepaid Insurance
f.	Work in Process-Making Department
	Work in Process-Packing Department
	Factory Overhead-Making Department
	Factory Overhead-Packing Department
g.	Work in Process-Packing Department
	Work in Process-Making Department
h.	Finished Goods
	Work in Process-Packing Department
i.	Cost of Goods Sold
	Finished Goods

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. If required, use the minus sign to indicate a credit balance.

Factory Overhead—Making Department	$	Credit
Factory Overhead—Packing Department	$	Debit

Answer 1

Item	Account				Debit	Credit
a.	Materials				93,450
	Accounts payable					93,450
b.	work in process-Making Deptt				61,730
	work in process-pcking Deptt				21,470
	Factory overhead -making Deptt				2,420
	Factory overhead -packing Deptt				870
	Materials					86,490
c.	work in process-Making Deptt				44,100
	work in process-pcking Deptt				29,770
	Factory overhead -making Deptt				8,540
	Factory overhead -packing Deptt				15,310
	Wages payable					97,720
d.	Factory overhead -making Deptt				8,050
	Factory overhead -packing Deptt				6,650
	Accumulated Depreciation					14,700
e	Factory overhead -making Deptt				1,530
	Factory overhead -packing Deptt				610
	prepaid insurance					2,140
f.	work in process-Making Deptt				21,050
	work in process-pcking Deptt				23,250
	Factory overhead -making Deptt					21,050
	Factory overhead -packing Deptt					23,250
g.	work in process-packing department				127,250
	work in process-making department					127,250
h.	finished goods				200,260
	work in process-packing department					200,260
i.	cost of goods sold				201,000
	finished goods					201,000
2)
	materials				8,610
	work in process -Making Department				2,550
	work in process-Packing Department				5,280
	finished goods				6,760
	t-Accounts
	materials
	opening	1,650	Requistioned		86,490
	purchases	93,450
	end bal	8,610
	work in process-making deptt
	opening	2,920
	DM	61,730	trfg -packing deptt		127,250
	DL	44,100
	OH applied	21,050
	end bal	2,550
	work in process-pcking deptt
	opening	3,800
	trfd making	127,250
	DM	21,470	finished goods		200,260
	DL	29,770
	OH applied	23,250
	end bal	5,280
	finished goods
	opening	7,500	cost of goods sold		201,000
	WIP-packing	200,260
	end bal	6,760
3)
	Factory overhea-making department				-510	Credit
	Factory overhead -packing department				470	Debit
	Factory overhead-making department
	indirect mt	2,420	WIP		21,050
	ind lab	8,540
	dep	8,050
	prepaid	1,530
			end bal		510
	Factory overhead-packing department
	indirect mt	870	WIP		23,250
	ind lab	15,310
	dep	6,650
	prepaid	610
	end bal	470