Question

Use the following information for the Exercises below.

[The following information applies to the questions displayed below.]

Pro-Weave manufactures stadium blankets by passing the products through a weaving department and a sewing department. The following information is available regarding its June inventories:

	Beginning Inventory			Ending Inventory
Raw materials inventory	$	156,000		$	277,000
Work in process inventory—Weaving		490,000			515,000
Work in process inventory—Sewing		700,000			945,000
Finished goods inventory		1,406,000			1,216,000

The following additional information describes the company’s manufacturing activities for June:

Raw materials purchases (on credit)	$	570,000
Factory wages cost (paid in cash)		3,390,000
Other factory overhead cost (Other Accounts credited)		162,000
Materials used
Direct—Weaving	$	248,000
Direct—Sewing		147,000
Indirect		182,000
Labor used
Direct—Weaving	$	1,225,000
Direct—Sewing		415,000
Indirect		1,750,000
Overhead rates as a percent of direct labor
Weaving		85	%
Sewing		150	%
Sales (on credit)	$	4,350,000

Exercise 16-14 Production cost flow and measurement; journal entries LO P1, P2, P3, P4

1. Compute the (a) cost of products transferred from weaving to sewing, (b) cost of products transferred from sewing to finished goods, and (c) cost of goods sold.
2. Prepare journal entries dated June 30 to record (a) goods transferred from weaving to sewing, (b) goods transferred from sewing to finished goods, and (c) sale of finished goods.

Compute the (a) cost of products transferred from weaving to sewing, (b) cost of products transferred from sewing to finished goods, and (c) cost of goods sold.

	(a) Sewing (b) Finished Goods (c) Cost of goods sold

Prepare journal entries dated June 30 to record (a) goods transferred from weaving to sewing, (b) goods transferred from sewing to finished goods, and (c) sale of finished goods.

• 1

  Record the goods transferred from weaving to sewing.

• 2

  Record the goods transferred from sewing to finished goods.

• 3

  Record the sale of goods on account.

• 4

  Record the cost of goods sold.

Exercise 16-15 Recording product costs LO P1, P2, P3

1. Prepare journal entries dated June 30 to record: (a) raw materials purchases, (b) direct materials usage, (c) indirect materials usage, (d) direct labor usage, (e) indirect labor usage, (f) other overhead costs, (g) overhead applied, and (h) payment of total wages costs.

• 1

  Record the purchase of raw materials on account.

• 2

  Record the usage of direct materials.

• 3

  Record the usage of indirect materials.

• 4

  Record the cost of direct labor incurred, but not yet paid.

• 5

  Record the cost of indirect labor incurred, but not yet paid.

• 6

  Record the cost of other overhead (credit Other accounts).

• 7

  Record the application of overhead.

• 8

  Record the payment of total factory payroll.

Answer 1

				Weaving	Sewing
	Beginning wip			490,000	700,000
	transferred to sewing				2,489,250
	Cost added during the year
	Direct materiald			248,000	147,000
	direct labor			1,225,000	415,000
	overhead applied			1041250	622500
	total cost added			2,514,250	1,184,500
	total cost .			3,004,250	4,373,750
	less ending inventory			515,000	945,000
	cost completed			2,489,250	3,428,750
	cost of goods sold
	beginning finished goods inventory				1,406,000
	Add cost from sewing				3,428,750
	total goods Available				4,834,750
	Ending finished goods inventory				1,216,000
	cost of goods sold				3,618,750
1)	a)Cost of products transferred from weaving to sewing						2,489,250
	b)cost of products transferred from sewing to finished-						3,428,750
	c)cost of goods sold -						3,618,750
2)	Journal entries
	Accounting titles & explanations					Debit	Credit
1)	Work in process -sewing					2,489,250
	work in process-weaving						2,489,250
2)	Finished goods inventory					3,428,750
	work in process -sewing						3,428,750
4)	Cost of goods sold					3,618,750
	finished goods inventory						3,618,750
3)	Accounts receivable					4,350,000
	Sales						4,350,000
	sale of goods on account
	Journal Entries
	Accounting titles & explanations					Debit	Credit
a)	Raw materials inventory					570,000
	Accounts payable						570,000
b)	Work in process inventory-weaving					248,000
	Work in process inventory-sewing					147,000
	Raw materials inventory						395,000
c)	Factory overhead					182,000
	Raw materials inventory						182,000
d)	Work in process inventory-weaving					1,225,000
	Work in process inventory-sewing					415,000
	Factory wages payable						1,640,000
e)	Factory overhead					1,750,000
	Factory wages payable						1,750,000
f)	Factory overhead					162,000
	Accounts payable						162,000
g)	Work in process inventory-weaving					1041250
	Work in process inventory-sewing					622500
	Factory overhead						1663750
h)	Factory wages payable					3,390,000
	cash						3,390,000