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Cost of Materials Issuances Under the FIFO Method An incomplete subsidiary ledger of materials inventory for...

Cost of Materials Issuances Under the FIFO Method

An incomplete subsidiary ledger of materials inventory for May is as follows:

a. Complete the materials issuances and balances for the materials subsidiary ledger under FIFO.

Received Issued Balance
Receiving
Report
Number		 Quantity Unit
Price		 Materials
Requisition
Number		 Quantity Amount Date Quantity Unit
price		 Amount
May 1 370 $5 $1,850
27 260 $7 May 4
105 420 $ May 10
33 170 9 May 21
118 250 May 27

b. Determine the materials inventory balance at the end of May.
$

c. Journalize the summary entry to transfer materials to work in process.

d. Comparing as reported in the materials ledger with predetermined order points would enable management to order materials before a(n) causes idle time.

Solutions

Expert Solution

A)

RECEIVED

ISSUED

BALANCE

Receiving

Materials

Report

Unit

Requisition

Unit

Number

Quantity

Price

Number

Quantity

Amount

Date

Quantity

Price

Amount

1-May

370

$5.00

$1,850

27

260

$7.00

4-May

370

$5.00

$1,850

260

$7.00

$1,820

105

370

1850

10-May

210

$7.00

$1,470

50

350

33

170

9

21-May

210

7

$1,470

170

9

$1,530

118

210

1470

27-May

130

9

$1,170

40

360

Balance

130

1170

_______________________________________________________________

B)

Determine the materials inventory balance at the end of May.=$1170

_______________________________________________________________________

C)

Journalize the summary entry to transfer materials to work in process

Date

Description

Debit $

Credit $

31-May

Work in progress inventory
(1850+350+1470+360)

4030

Raw material Inventory

4030

( to record the transfer of material in to
work in progress account)

_________________________________________

D)

Comparing quantities on hand as reported in the materials ledger with predetermined order points enables management to order materials before a lack of materials causes idle time. Also, the subsidiary ledger can include columns for recording quantities ordered, so that management can have easy access to information about materials on order.

ekkarill92 answered 2 years ago
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