Question

Chapter 17 PR 17-1B

PR.17-01B.ALGO

Hide or show questions

Progress:1/1 items

eBook

Show Me How

Calculator

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	$19,190
Work in Process—Making	7,460
Work in Process—Packing	9,720
Materials	4,210

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		$238,990
b.	Materials requisitioned for use
		Phosphate—Making Department	$157,870
		Packaging—Packing Department	54,910
		Indirect materials—Making Department	6,180
		Indirect materials—Packing Department	2,220
c.	Labor used
		Direct labor—Making Department	$112,790
		Direct labor—Packing Department	76,130
		Indirect labor—Making Department	21,840
		Indirect labor—Packing Department	39,160
d.	Depreciation charged on fixed assets
		Making Department	$20,590
		Packing Department	17,000
e.	Expired prepaid factory insurance
		Making Department	$3,900
		Packing Department	1,560
f.	Applied factory overhead
		Making Department	$53,820
		Packing Department	59,470
g.	Production costs transferred from Making Department to Packing Department		$325,420
h.	Production costs transferred from Packing Department to Finished Goods		$512,150
i.	Cost of goods sold during the period		$514,020

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.	Materials
	Accounts Payable
b.	Work in Process-Making Department
	Work in Process-Packing Department
	Factory Overhead-Making Department
	Factory Overhead-Packing Department
	Materials
c.	Work in Process-Making Department
	Work in Process-Packing Department
	Factory Overhead-Making Department
	Factory Overhead-Packing Department
	Wages Payable
d.	Factory Overhead-Making Department
	Factory Overhead-Packing Department
	Accumulated Depreciation
e.	Factory Overhead-Making Department
	Factory Overhead-Packing Department
	Prepaid Insurance
f.	Work in Process-Making Department
	Work in Process-Packing Department
	Factory Overhead-Making Department
	Factory Overhead-Packing Department
g.	Work in Process-Packing Department
	Work in Process-Making Department
h.	Finished Goods
	Work in Process-Packing Department
i.	Cost of Goods Sold
	Finished Goods

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. If required, use the minus sign to indicate a credit balance.

Factory Overhead—Making Department	$	Credit
Factory Overhead—Packing Department	$	Debit

Answer 1

Item	Account				Debit	Credit
a.	Materials				238,990
	Accounts payable					238,990
b.	work in process-Making Deptt				157,870
	work in process-pcking Deptt				54,910
	Factory overhead -making Deptt				6,180
	Factory overhead -packing Deptt				2,220
	Materials					221,180
c.	work in process-Making Deptt				112,790
	work in process-pcking Deptt				76,130
	Factory overhead -making Deptt				21,840
	Factory overhead -packing Deptt				39,160
	Wages payable					249,920
d.	Factory overhead -making Deptt				20,590
	Factory overhead -packing Deptt				17,000
	Accumulated Depreciation					37,590
e	Factory overhead -making Deptt				3,900
	Factory overhead -packing Deptt				1,560
	prepaid insurance					5,460
f.	work in process-Making Deptt				53,820
	work in process-pcking Deptt				59,470
	Factory overhead -making Deptt					53,820
	Factory overhead -packing Deptt					59,470
g.	work in process-packing department				325,420
	work in process-making department					325,420
h.	finished goods				512,150
	work in process-packing department					512,150
i.	cost of goods sold				514,020
	finished goods					514,020
2)
	materials				22,020
	work in process -Making Department				6,520
	work in process-Packing Department				13,500
	finished goods				17,320
	t-Accounts
	materials
	opening	4,210	Requistioned		221,180
	purchases	238,990
	end bal	22,020
	work in process-making deptt
	opening	7,460
	DM	157,870	trfg -packing deptt		325,420
	DL	112,790
	OH applied	53,820
	end bal	6,520
	work in process-pcking deptt
	opening	9,720
	trfd making	325,420
	DM	54,910	finished goods		512,150
	DL	76,130
	OH applied	59,470
	end bal	13,500
	finished goods
	opening	19,190	cost of goods sold		514,020
	WIP-packing	512,150
	end bal	17,320
3)
	Factory overhea-making department				1,310	Credit
	Factory overhead -packing department				470	Debit
	Factory overhead-making department
	indirect mt	6,180	WIP		53,820
	ind lab	21,840
	dep	20,590
	prepaid	3,900
			end bal		1,310
	Factory overhead-packing department
	indirect mt	2,220	WIP		59,470
	ind lab	39,160
	dep	17,000
	prepaid	1,560
	end bal	470