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Finished Goods and Cost of Goods Sold Before the completed production for June is recorded, the...

Finished Goods and Cost of Goods Sold

Before the completed production for June is recorded, the work in process inventory account for James Company appears as follows:

Work in Process Inventory
Balance June 1 $88,000
Direct material 247,500
Direct labor 176,000
Manufacturing overhead applied 187,000

Assume that completed production for June includes Jobs 107, 108, and 109 with total costs of $154,000, $324,500, and $137,500, respectively.

a. Determine the cost of unfinished jobs at June 30 and prepare a journal entry to record completed production.

Work in process balance as of June 30 $Answer

General Journal
Description Debit Credit
AnswerAccounts receivableCost of goods soldFinished goods inventorySalesWork in process inventory Answer Answer
AnswerAccounts receivableCost of goods soldFinished goods inventorySalesWork in process inventory Answer Answer

b. Using general journal entries, record the sale of Job 107 for $220,000 on account.

General Journal
Description Debit Credit
AnswerAccounts receivableCost of goods soldFinished goods inventorySalesWork in process inventory Answer Answer
AnswerAccounts receivableCost of goods soldFinished goods inventorySalesWork in process inventory Answer Answer
To transfer cost to expense.
AnswerAccounts receivableCost of goods soldFinished goods inventorySalesWork in process inventory Answer Answer
AnswerAccounts receivableCost of goods soldFinished goods inventorySalesWork in process inventory Answer Answer
To record sale of job 107.

Solutions

Expert Solution

Particulars Amount (in $)
Beginning Balance $ 88,000
Direct material $ 247,500
Direct labor $ 176,000
Manufacturing overhead applied $ 187,000
Total Manufacturing Costs (A) $ 698,500
Particulars Amount (in $)
Job 107 $ 154,000
Job 108 $ 324,500
Job 109 $ 137,500
Cost of Completed Jobs (B) $ 616,000
Cost of unfinished jobs
( A - B)		 $ 82,500
($698,500 (-) $616,000)
(a)
Accounts titles and Explanation Debit Credit
Finished goods inventory $ 616,000
          Work in process inventory $ 616,000
( To record completed production )
(b)
Accounts titles and Explanation Debit Credit
Cost of Goods sold $ 154,000
          Finished goods inventory $ 154,000
(To transfer costs to expenses)
Account receivable $ 220,000
             Sales $ 220,000
(To record sale of Job 107)

ekkarill92 answered 1 year ago
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