Question

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	$	140,000		$	281,000
Work in process inventory—Weaving		360,000			420,000
Work in process inventory—Sewing		650,000			920,000
Finished goods inventory		1,276,000			1,396,000

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

Raw materials purchases (on credit)	$	520,000
Factory payroll cost (paid in cash)		3,545,000
Other factory overhead cost (Other Accounts credited)		206,000
Materials used
Direct—Weaving	$	308,000
Direct—Sewing		141,000
Indirect		162,000
Labor used
Direct—Weaving	$	1,325,000
Direct—Sewing		445,000
Indirect		1,775,000
Overhead rates as a percent of direct labor
Weaving		90	%
Sewing		155	%
Sales (on credit)	$	4,550,000

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 payroll costs.

Answer 1

1. According to the Question, we need to prepare the Journal Entries of Pro-Weave Co.:

Event	Particulars	Debit Amount($)	Credit Amount($)
1.	Raw Materials Inventory To Accounts Payable a/c (To record Raw material purchases)	520,000	520,000
2.	Work in process inventory-Weaving Work in process inventory-Sewing To Raw Materials Inventory a/c (To record Direct materials usage)	308,000 141,000	449,000
3.	Factory Overheads a/c To Raw Materials Inventory a/c (To record Indirect Materials usage)	162,000	162,000
4.	Work in process inventory-Weaving Work in process inventory-Sewing To Factory wages Payable a/c (To record Direct Labor usage)	1,325,000 445,000	1,770,000
5.	Factory Overhead a/c To Factory Wages Payable a/c (To record Indirect Labor usage)	1,775,000	1,775,000
6.	Factory Overhead To Other Accounts (To record other overhead costs)	206,000	206,000
7.	Work in process inventory-Weaving Work in process inventory-Sewing To Factory Overhead (To record overheads applied)	1,192,500 689,750	1,882,250
8.	Factory Wages Payable a/c To Cash a/c (To record payment of total payroll costs)	3,545,000	3,545,000

The above Transactions are recorded in Journal.

Working Notes:

1.In the 2nd entry, the Direct material is a part of prime cost and would not be considered as a factory cost.

2.In the 3rd entry, Indirect material is a part of Factory Overheads and considered as a Factory cost.

3. In 4th entry, The Direct Labor is a part of Prime cost.

4.In 5th entry, The Indirect Material is a part of Factory cost and will be transferred into Factory Overheads.

5. In 6th entry, other overheads is a part of Factory cost.