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Forest Components makes aircraft parts. The following transactions occurred in July. Purchased $16,900 of materials on...

Forest Components makes aircraft parts. The following transactions occurred in July.

  1. Purchased $16,900 of materials on account.

  2. Issued $16,900 in direct materials to the production department.

  3. Issued $1,290 of supplies from the materials inventory.

  4. Paid for the materials purchased in transaction (1) using cash.

  5. Returned $2,200 of the materials issued to production in (2) to the materials inventory.

  6. Direct labor employees earned $31,100, which was paid in cash.

  7. Purchased miscellaneous items for the manufacturing plant for $17,390 on account.

  8. Recognized depreciation on manufacturing plant of $36,600.

  9. Applied manufacturing overhead for the month.

Forest uses normal costing. It applies overhead on the basis of direct labor costs using an annual, predetermined rate. At the beginning of the year, management estimated that direct labor costs for the year would be $435,000. Estimated overhead for the year was $408,900.

The following balances appeared in the inventory accounts of Forest Components for July.

Beginning Ending
Materials Inventory ? $ 12,410
Work-in-Process Inventory ? 10,540
Finished Goods Inventory $ 2,800 7,090
Cost of Goods Sold ? 75,400

Required:

a. Prepare journal entries to record these transactions.

b. Prepare T-accounts to show the flow of costs during the period from Materials Inventory through Cost of Goods Sold.

Solutions

Expert Solution

In this question, we have explained how the transactions are recorded using journal entry with narrations.After posting the entries, we have prepared accounts in a flow to production starting from material account to coat of goods sold.

Working for finding balance for opening for WIP has been calculated reverse calculations. where we have calculated the units transfered from finished account from Cogs, after that from the finiahed goods accountz, we will calculaye balancing fifas WIP tranfered, which will help in finding the opening units  

Thanks

Please find the ATTACHMENT

If you like my explanation, do hit a thumps up?

ekkarill92 answered 1 year ago
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