Question

Entries for Process Cost System Preston & Grover Soap Company manufactures powdered detergent. Phosphate is placed in process in the Making Department, where it is turned into granulars. The output of Making is transferred to the Packing Department, where packaging is added at the beginning of the process. On July 1, Preston & Grover Soap Company had the following inventories: Finished Goods $4,920 Work in Process—Making 1,910 Work in Process—Packing 2,490 Materials 1,080 Departmental accounts are maintained for factory overhead, which both have zero balances on July 1. Manufacturing operations for July are summarized as follows: a. Materials purchased on account $61,280 b. Materials requisitioned for use Phosphate—Making Department $40,480 Packaging—Packing Department 14,080 Indirect materials—Making Department 1,580 Indirect materials—Packing Department 570 c. Labor used Direct labor—Making Department $28,920 Direct labor—Packing Department 19,520 Indirect labor—Making Department 5,600 Indirect labor—Packing Department 10,040 d. Depreciation charged on fixed assets Making Department $5,280 Packing Department 4,360 e. Expired prepaid factory insurance Making Department $1,000 Packing Department 400 f. Applied factory overhead Making Department $13,800 Packing Department 15,250 g. Production costs transferred from Making Department to Packing Department $83,440 h. Production costs transferred from Packing Department to Finished Goods $131,320 i. Cost of goods sold during the period $131,800 Required: 1. Journalize the entries to record the operations, identifying each entry by letter. For a compound transaction, if an amount box does not require an entry, leave it blank.

Answer 1

Item	Account				Debit	Credit
a.	Materials				61,280
	Accounts payable					61,280
b.	work in process-Making Deptt				40,480
	work in process-pcking Deptt				14,080
	Factory overhead -making Deptt				1,580
	Factory overhead -packing Deptt				570
	Materials					56,710
c.	work in process-Making Deptt				28,920
	work in process-pcking Deptt				19,520
	Factory overhead -making Deptt				5,600
	Factory overhead -packing Deptt				10,040
	Wages payable					64,080
d.	Factory overhead -making Deptt				5,280
	Factory overhead -packing Deptt				4,360
	Accumulated Depreciation					9,640
e	Factory overhead -making Deptt				1,000
	Factory overhead -packing Deptt				400
	prepaid insurance					1,400
f.	work in process-Making Deptt				13,800
	work in process-pcking Deptt				15,250
	Factory overhead -making Deptt					13,800
	Factory overhead -packing Deptt					15,250
g.	work in process-packing department				83,440
	work in process-making department					83,440
h.	finished goods				131,320
	work in process-packing department					131,320
i.	cost of goods sold				131,800
	finished goods					131,800