In: Accounting
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.
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 |
4030 |
|
Raw material Inventory |
4030 |
||
( to record the transfer of material in to |
_________________________________________
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.