Question

Teacher Stars produces stars for elementary teachers to reward their students. Teacher ​Stars' trial balance on June 1​ follows:

Teacher StarsTrial Balance June 1, 2016

Balance

Account Title

Debit

Credit

Cash

$22,000

Accounts Receivable

188,000

Inventories:

Raw Materials

6,300

Work-in-Process

40,000

Finished Goods

22,800

Plant Assets

300,000

Accumulated Depreciation

$68,000

Accounts Payable

133,000

Wages Payable

2,000

Common Stock

147,000

Retained Earnings

229,100

Sales Revenue

Cost of Goods Sold

Manufacturing Overhead

Selling and Administrative Expenses

Total

$579,100

$579,100

June1 balances in the subsidiary ledgers were as​ follows:

Raw Materials Inventory subsidiary​ledger: Paper,$ 4,700​ indirect​ materials, $1,600
	​Work-in-Process Inventory subsidiary​ ledger: Job​ 120,$40,000​ Job​ 121, $0
bullet•	Finished Goods Inventory subsidiary​ ledger: Large​ Stars,$9,600​; Small​ Stars, $13,200

June transactions are summarized as​ follows:

Collections on account, $144,000. b. Selling and administrative expenses incurred and paid, $27,000. c. Payments on account, $37,000. d. Materials purchased on account: Paper, $23,300; indirect materials, $4,000. e. Materials requisitioned and used in production: Job 120: Paper, $ 450 Job 121: Paper, $ 7,550 Indirect materials, $ 1,200 f. Wages incurred during , . Labor time records for the month: Job 120, ; Job 121, ; indirect labor, . June $34,000 $3,250 $16,600 $14,150 g. Wages paid in include the balance in the Wages Payable at plus of wages incurred during . June May 31 $31,200 June h. Depreciation on plant and equipment, $3,400. i. Manufacturing overhead allocated at the predetermined overhead allocation rate of 60% of direct labor cost. j. Jobs completed during the month: Job 120 with 900,000 Large Stars at a total cost of $45,650. k. Sales on account: all of Job 120 for $100,000. l. Adjusted for overallocated or underallocated manufacturing overhead.

1. Journalize the transactions for the company. 2. T-accounts for the general ledger, the Raw Materials Inventory subsidiary ledger, the Work-in-Process Inventory subsidiary ledger, and the Finished Goods Inventory subsidiary ledger have been opened for you along with each account's balance as given. Post the journal entries to the T-accounts using the transaction letters as a reference. 3. Prepare a trial balance at June 30, 2016. 4. Use the Work-in-Process Inventory T-account to prepare a schedule of cost of goods manufactured for the month of June. 5. Prepare an income statement for the month of June.

Answer 1

ans 1
Transa	Accounst Title	Dr	Cr
a	Cash	$144,000
	Accounts Receivable		$144,000
b)	Selling & Administraive expeses	27000
	Cash		27000
c)	Accounts payable	27000
	Cash		27000
d)	Raw Material Inventory	$27,300
	Accounst Payable		$27,300
e	Work in Process Inventory	$8,000
	Manufacturing Overhead	1200
	Raw material Inventory		$9,200
f	Work in Process Inventory	$19,850
	Manufacturing Overhead	14150
	Wages payable		$34,000
g	Wages payable	$33,200
	Cash		$33,200
h	Manufacturing Overhead	3400
	Accumulated Depreciation		3400
i	Work in Process Inventory	$11,910.0
	Manufacturing Overhead		$11,910.0
	(60%*19850)
j	Finished Goods Inventory	45650
	Work in Process Inventory		45650
k	Accounts Receivable	100000
	Sales		100000
	Cost of good sold	45650
	Finished Goods Inventory		45650
l	Manufacturing Overhead	$6,840
	Cost of Good sold (overapplied)		6840

ans 2	Raw Material Inventory
	Opening Balance	6300	e) WIP	$8,000
	d) accounts payable	$27,300	e) Man. Overhead	$1,200
	EndinG balance	$24,400
	Work In process
	Opening Balance	40000	Finsihed Goods Inv	$45,650
	e)Raw material	8000
	f) Wages payable	$19,850
	i) ManufacturingOverhead	$11,910
	Ending balance	34110
	Cost of good sold
	Finished Goods Inventory	45650

Finsihed Goods
Opening Balance	22800	Cost of good sold	$45,650
Work In process	$45,650
Ending balance	$22,800
Manufacturing Overhead
e)Raw material	1200	i)Work In process	$11,910
f) Wages payable	14150
h) Accumulated Depreciation	3400
end bal	$6,840

	Wages payable
Cash	31200	Op bal	2000
		Work in Process Inventory	$19,850
		Manufacturing Overhead	14150
		End bal	4800

	Trial Balance	Dr	Cr
ans 3	Cash	$87,640
	Accounts Receivable	$144,000
	Inventories:
	Raw Materials	$24,400
	Work-in-Process	34110
	Finished Goods	$22,800
	Plant Assets	300000
	Accumulated Depreciation		71400
	Accounst payable		$133,300
	Wages payable		4800
	Common stock		147000
	Retained Eranings		229100
	Sales Revenue		100000
	Cost of Goods Sold	45650
	Selling & administrative expenses	27000
	Total	$685,600	$685,600

ans 4	Statement of Cost of Goods manufactured
	Direct Material
	Beginning, Direct Material	$4,700
	Add: Direct material purchased	23300
	Total Direct Material Available	$28,000
	Less: ending, Direct material	$20,000
	Direct Material used		$8,000
	Direct Labor		$19,850
	Manufacturing overhead
	Indirect Labor	$14,150
	Indirect Material	1200
	Depreciation	3400
	Total manufacturing overhead		18750
	Total manufacturing cost		$46,600
	Beginning , work in process		40000
	Ending, Work in process		34110
	Cost of Goods Manufactured		$52,490
ans 5	Income statement
	Sales		100000
	Less: cost of Good sold
	Opening FG Inventory	22800
	Add: Cost of good manufactured	$52,490
	Less: Manufacturing overhead	$6,840
	Less: ending Invemtory	$22,800	$45,650
	Gross Profit		$54,350
	Less: selling & Administrative expenses		27000
	Net operating Income		$27,350