Question

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	$19,800
Work in Process—Making	7,700
Work in Process—Packing	10,030
Materials	4,350

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		$246,650
b.	Materials requisitioned for use:
		Phosphate—Making Department	$162,930
		Packaging—Packing Department	56,670
		Indirect materials—Making Department	6,380
		Indirect materials—Packing Department	2,290
c.	Labor used:
		Direct labor—Making Department	$116,400
		Direct labor—Packing Department	78,570
		Indirect labor—Making Department	22,540
		Indirect labor—Packing Department	40,410
d.	Depreciation charged on fixed assets:
		Making Department	$21,250
		Packing Department	17,550
e.	Expired prepaid factory insurance:
		Making Department	$4,030
		Packing Department	1,610
f.	Applied factory overhead:
		Making Department	$55,550
		Packing Department	61,370
g.	Production costs transferred from Making Department to Packing Department		$335,850
h.	Production costs transferred from Packing Department to Finished Goods		$528,560
i.	Cost of goods sold during the period		$530,500

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

1	a.	Raw Material inventory	$             246,650
		Accounts payable		$               246,650
	b.	Work in Process—Department Mixing	$             162,930
		Work in Process—Department Packing	$               56,670
		Factory Overhead— Department Mixing	$                  6,380
		Factory Overhead— Department Packing	$                  2,290
		Raw Material inventory		$               228,270
	c.	Work in Process— Department Mixing	$             116,400
		Work in Process— Department Packing	$               78,570
		Factory Overhead— Department Mixing	$               22,540
		Factory Overhead— Department Packing	$               40,410
		Wages Payable		$               257,920
	d.	Factory Overhead— Department Mixing	$               21,250
		Factory Overhead— Department Packing	$               17,550
		Accumulated Depreciation		$                 38,800
	e.	Factory Overhead— Department Mixing	$                  4,030
		Factory Overhead— Department Packing	$                  1,610
		Prepaid Insurance		$                   5,640
	f.	Work in Process— Department Mixing	$               55,550
		Work in Process— Department Packing	$               61,370
		Factory Overhead— Department Mixing		$                 55,550
		Factory Overhead— Department Packing		$                 61,370
	g.	Work in Process— Department Packing	$             335,850
		Work in Process— Department Mixing		$               335,850
	h.	Finished goods inventory	$             528,560
		Work in Process— Department Packing		$               528,560
	i.	Cost of goods asold	$             530,500
		Finished goods inventory		$               530,500

Ques 2
		Work in	Work in
		Process—	Process—	Finished
	Materials	Dept. Mixing	Dept. Packing	goods
Balance, January 1	4,350	7,700	10,030	19,800
Debit	246,650	334,880	531,490	528,560
Credit	-228,270	-335,850	-528,560	-530,500
balance, January 31	22,730	6,730	12,960	17,860
ques 3
	Factory	Factory
	ovehead	ovehead
	Mixing	Packing
Balance, January 1	0	0
Debit	54,200	61,860
Credit	-55,550	-61,370
balance, January 31	-1,350	490
	(credit)

Working note:

Mixing	Packing	Foh-mix	Foh-pack
$      162,930	56,670	$        6,380	$        2,290
$      116,400	$      78,570	$     22,540	$      40,410
$        55,550	$      61,370	$     21,250	$      17,550
		$        4,030	$        1,610
$      334,880	$    196,610	$     54,200	$      61,860