Question

Fire Out Company manufactures its product, Vitadrink, through two manufacturing processes: Mixing and Packaging. All materials are entered at the beginning of each process. On October 1, 2020, inventories consisted of Raw Materials $26,000, Work in Process—Mixing $0, Work in Process—Packaging $251,000, and Finished Goods $290,000. The beginning inventory for Packaging consisted of 11,000 units that were 50% complete as to conversion costs and fully complete as to materials. During October, 51,000 units were started into production in the Mixing Department and the following transactions were completed.

1.		Purchased $301,000 of raw materials on account.
2.		Issued raw materials for production: Mixing $211,000 and Packaging $46,000.
3.		Incurred labor costs of $280,900.
4.		Used factory labor: Mixing $183,500 and Packaging $97,400.
5.		Incurred $812,000 of manufacturing overhead on account.
6.		Applied manufacturing overhead on the basis of $22 per machine hour. Machine hours were 29,000 in Mixing and 7,000 in Packaging.
7.		Transferred 46,000 units from Mixing to Packaging at a cost of $980,000.
8.		Transferred 54,000 units from Packaging to Finished Goods at a cost of $1,316,000.
9.		Sold goods costing $1,641,000 for $2,501,000 on account.

Journalize the October transactions.

Answer 1

Journal entries

No	General Journal	Debit	Credit
1	Raw material	301000
	Account payable		301000
2	Work in process-Mixing	211000
	Work in process-Packing	46000
	Raw material		257000
3	Factory labor	280900
	Wages payable		280900
4	Work in process-Mixing	183500
	Work in process-Packing	97400
	Factory labor		280900
5	Manufacturing overhead	812000
	Account payable		812000
6	Work in process-Mixing (29000*22)	638000
	Work in process-Packing (7000*22)	154000
	Manufacturing overhead		792000
7	Work in process-Packing	980000
	Work in process-Mixing		980000
8	Finished goods	1316000
	Work in process-Packing		1316000
9	Account receivable	2501000
	Sales revenue		2501000
	(To record sales)
	Cost of goods sold	1641000
	Finished goods		1641000
	(To record cost of goods sold)