Question

make sure to do all parts

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	$15,380
Work in Process—Making	5,980
Work in Process—Packing	7,790
Materials	3,380

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		$191,500
b.	Materials requisitioned for use
		Phosphate—Making Department	$126,500
		Packaging—Packing Department	44,000
		Indirect materials—Making Department	4,950
		Indirect materials—Packing Department	1,780
c.	Labor used
		Direct labor—Making Department	$90,380
		Direct labor—Packing Department	61,000
		Indirect labor—Making Department	17,500
		Indirect labor—Packing Department	31,380
d.	Depreciation charged on fixed assets
		Making Department	$16,500
		Packing Department	13,630
e.	Expired prepaid factory insurance
		Making Department	$3,130
		Packing Department	1,250
f.	Applied factory overhead
		Making Department	$43,130
		Packing Department	47,650
g.	Production costs transferred from Making Department to Packing Department		$260,750
h.	Production costs transferred from Packing Department to Finished Goods		$410,380
i.	Cost of goods sold during the period		$411,880

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.

Item	Account	Debit	Credit
a.
b.
c.
d.
e.
f.
g.
h.
i.

2. Compute the July 31 balances of the inventory accounts.

Materials	$
Work in Process—Making Department	$
Work in Process—Packing Department	$
Finished Goods	$

3. Compute the July 31 balances of the factory overhead accounts.

Factory Overhead—Making Department	$
Factory Overhead—Packing Department	$

Answer 1

	Date	Accounts title and explanation	Debit	Credit
	a	Materials	$191,500
		Accounts Payable		$191,500
	b	Work in Process—Making Department	$126,500
		Work in Process—Packing Department	$ 44,000
		Factory Overhead—Making Department	$    4,950
		Factory Overhead—Packing Department	$    1,780
		Materials		$177,230
	c	Work in Process—Making Department	$ 90,380
		Work in Process—Packing Department	$ 61,000
		Factory Overhead—Making Department	$ 17,500
		Factory Overhead—Packing Department	$ 31,380
		Wages Payable		$200,260
	d	Factory Overhead—Making Department	$ 16,500
		Factory Overhead—Packing Department	$ 13,630
		Accumulated Depreciation		$ 30,130
	e	Factory Overhead—Making Department	$    3,130
		Factory Overhead—Packing Department	$    1,250
		Prepaid Insurance		$    4,380
	f	Work in Process—Making Department	$ 43,130
		Work in Process—Packing Department	$ 47,650
		Factory Overhead—Making Department		$ 43,130
		Factory Overhead—Packing Department		$ 47,650
	g	Work in Process—Packing Department	$260,750
		Work in Process—Making Department		$260,750
	h	Finished Goods	$410,380
		Work in Process—Packing Department		$410,380
	i	Cost of Goods Sold	$411,880
		Finished Goods		$411,880
2			Materials	Work in Process - Making Dept.	Work in Process - Packing Dept.	Finished Goods
		Balance, October 1	$    3,380	$    5,980	$    7,790	$ 15,380
		Debits	191,500	260,010	413,400	410,380
		Credits	(177,230)	(260,750)	(410,380)	(411,880)
		Balance, October 31	$ 17,650	$    5,240	$ 10,810	$ 13,880
		1 $126,500 + $90,380 + $43,130
		2 $44,000 + $61,000 + $47,650 + $260,750
3			Factory Overhead —making Dept.	Factory Overhead —Packing Dept.
		Balance, October 1	$               -	$               -
		Debits	42,080	48,040
		Credits	(43,130)	(47,650)
		Balance, October 31	(1,050)	390
		1 $4,950 + $17,500 + $16,500 + $3,130
		2 $1,780 + $31,380 + $13,630 + $1,250