Question

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Li Company produces large quantities of a standardized product. The following information is available for its production activities for January.

Raw materials				Factory overhead incurred
Beginning inventory	$	18,000		Indirect materials used	$	82,500
Raw materials purchased (on credit)		280,000		Indirect labor used		40,000
Direct materials used		(169,000	)	Other overhead costs		159,600
Indirect materials used		(82,500	)	Total factory overhead incurred	$	282,100
Ending Inventory	$	46,500
				Factory overhead applied
Factory payroll				(140% of direct labor cost)
Direct labor used	$	201,500		Total factory overhead applied	$	282,100
Indirect labor used		40,000
Total payroll cost (paid in cash)	$	241,500

Additional information about units and costs of production activities follows.

Units			Costs
Beginning goods in process inventory	2,200		Beginning goods in process inventory
Started	36,000		Direct materials	$	3,000
Ending goods in process inventory	4,900		Direct labor		2,800
			Factory overhead		4,500
						$	10,300
Status of ending goods in process inventory			Direct materials added				169,000
Materials—Percent complete	80	%	Direct labor added				201,500
Labor and overhead—Percent complete	75	%	Overhead applied (140% of direct labor)				282,100
			Total costs			$	662,900
			Ending goods in process inventory			$	66,914

During January, 24,000 units of finished goods are sold for $180 cash each. Cost information regarding finished goods follows.

Beginning finished goods inventory	$	170,000
Cost transferred in		595,986
Cost of goods sold		(592,390	)
Ending finished goods inventory	$	173,596

1.

value:
35.00 points

Required information

Required:
1(a)	Prepare journal entry dated January 31 to record the purchase of raw materials. (Omit the "$" sign in your response.)

  

Date	General Journal	Debit	Credit
Jan. 31	(Click to select)Accounts payableRaw materials inventoryFactory payrollSalesFactory overheadCashCost of goods soldFinished goods inventory
	(Click to select)Factory payrollCashAccounts payableSalesRaw materials inventoryCost of goods soldFactory overheadFinished goods inventory

  

1(b)	Prepare journal entry dated January 31 to record the direct materials usage. (Omit the "$" sign in your response.)

  

Date	General Journal	Debit	Credit
Jan. 31	(Click to select)Factory payrollAccounts payableCashFinished goods inventoryGoods in process inventoryFactory overheadRaw materials inventoryOther accounts
	(Click to select)Finished goods inventoryFactory payrollRaw materials inventoryOther accountsFactory overheadGoods in process inventoryCashAccounts payable

    

1(c)	Prepare journal entry dated January 31 to record the indirect materials usage. (Omit the "$" sign in your response.)

  

Date	General Journal	Debit	Credit
Jan. 31	(Click to select)CashRaw materials inventoryFactory payrollCost of goods soldAccounts payableFactory overheadGoods in process inventoryFinished goods inventory
	(Click to select)Accounts payableFinished goods inventoryGoods in process inventoryFactory overheadCost of goods soldRaw materials inventoryFactory payrollCash

  

1(d)	Prepare journal entry dated January 31 to record the factory payroll costs. (Omit the "$" sign in your response.)

  

Date	General Journal	Debit	Credit
Jan. 31	(Click to select)Factory overheadSalesCashRaw materials inventoryGoods in process inventoryAccounts payableFactory payrollOther accounts
	(Click to select)Raw materials inventoryGoods in process inventorySalesAccounts payableFactory overheadCashOther accountsFactory payroll

  

1(e)	Prepare journal entry dated January 31 to record the direct labor costs used in production. (Omit the "$" sign in your response.)

  

Date	General Journal	Debit	Credit
Jan. 31	(Click to select)Factory payrollOther accountsSalesFactory overheadCost of goods soldCashFinished goods inventoryGoods in process inventory
	(Click to select)Factory payrollFinished goods inventoryFactory overheadGoods in process inventoryCost of goods soldCashSalesOther accounts

   

1(f)	Prepare journal entry dated January 31 to record the indirect labor costs. (Omit the "$" sign in your response.)

   

Date	General Journal	Debit	Credit
Jan. 31	(Click to select)Factory payrollCashFactory overheadOther accountsFinished goods inventoryGoods in process inventoryCost of goods soldSales
	(Click to select)Other accountsCost of goods soldFactory payrollGoods in process inventoryCashSalesFactory overheadFinished goods inventory

    

1(g)	Prepare journal entry dated January 31 to record the other overhead costs—credit Other Accounts. (Omit the "$" sign in your response.)

    

Date	General Journal	Debit	Credit
Jan. 31	(Click to select)Goods in process inventoryFactory overheadFinished goods inventorySalesRaw materials inventoryOther accountsRevenuesCost of goods sold
	(Click to select)Finished goods inventoryFactory overheadCost of goods soldOther accountsSalesRaw materials inventoryRevenuesGoods in process inventory

   

1(h)	Prepare journal entry dated January 31 to record the overhead applied. (Omit the "$" sign in your response.)

  

Date	General Journal	Debit	Credit
Jan. 31	(Click to select)Accounts payableFactory overheadCashFinished goods inventoryCost of goods soldRaw materials inventoryGoods in process inventorySales
	(Click to select)CashRaw materials inventoryFactory overheadGoods in process inventoryCost of goods soldSalesAccounts payableFinished goods inventory

  

1(i)	Prepare journal entry dated January 31 to record the goods transferred to finished goods. (Omit the "$" sign in your response.)

Date	General Journal	Debit	Credit
Jan. 31	(Click to select)Finished goods inventoryCashCost of goods soldAccounts payableRaw materials inventoryFactory overheadGoods in process inventorySales
	(Click to select)Goods in process inventoryFinished goods inventorySalesFactory overheadCost of goods soldAccounts payableCashRaw materials inventory

  

1(j)	Prepare journal entries dated January 31 to record the sale of finished goods. (Omit the "$" sign in your response.)

  

Date	General Journal	Debit	Credit
Jan. 31	(Click to select)CashSalesFactory payrollAccounts payableRaw materials inventoryGoods in process inventoryFactory overheadAccounts receivable
	(Click to select)Raw materials inventoryGoods in process inventoryAccounts payableCashFactory payrollSalesAccounts receivableFactory overhead
	(Click to select)Raw materials inventoryCost of goods soldAccounts payableAccounts receivableFactory overheadGoods in process inventoryFinished goods inventoryFactory payroll
	(Click to select)Cost of goods soldFactory overheadAccounts receivableGoods in process inventoryFactory payrollFinished goods inventoryRaw materials inventoryAccounts payable

References

WorksheetLearning Objective: 20-C2 Define and compute equivalent units and explain their use in process cost accounting.Learning Objective: 20-P2 Record the flow of direct labor costs in process cost accounting.

Difficulty: 3 HardLearning Objective: 20-P1 Record the flow of direct materials costs in process cost accounting.Learning Objective: 20-P3 Record the flow of factory overhead costs in process cost accounting.

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2.

value:
35.00 points

Required information

2.

Prepare a process cost summary report for this company, showing costs charged to production, units cost information, equivalent units of production, cost per EUP, and its cost assignment and reconciliation. (Due to rounding of cost per unit, the total costs accounted for in the cost summary may not equal to sum of all the costs given in the problem. Round your cost per EUP answers to 2 decimal places and consider the same in the other calculations. Round other answers to the nearest dollar amount. Omit the "$" sign in your response.)

  

LI COMPANY
Process Cost Summary
For Month Ended January 31
Costs Charged to Production
Costs of beginning goods in process
(Click to select)Factory overheadDirect laborIndirect materialsIndirect laborDirect materials	$
(Click to select)Direct laborIndirect materialsDirect materialsFactory overheadIndirect labor
(Click to select)Direct laborIndirect materialsIndirect laborDirect materialsFactory overhead
		$
Costs incurred this period
(Click to select)Factory overheadIndirect materialsDirect materialsIndirect laborDirect labor	$
(Click to select)Factory overheadDirect materialsIndirect laborIndirect materialsDirect labor
(Click to select)Direct materialsIndirect laborFactory overheadDirect laborIndirect materials
Total costs to account for		$

  

Unit cost information
Units to account for		Units accounted for
(Click to select)Direct laborEnding goods in processCompleted & transferred outUnits started this periodBeginning goods in process		(Click to select)Direct laborEnding goods in processBeginning goods in processCompleted & transferred outUnits started this period
(Click to select)Completed & transferred outUnits started this periodEnding goods in processBeginning goods in processDirect labor		(Click to select)Completed & transferred outUnits started this periodDirect laborBeginning goods in processEnding goods in process
Total units to account for		Total units accounted for

  

Equivalent units of production	Direct Materials	Direct Labor	Factory Overhead
(Click to select)Units completed & transferred outDirect LaborEnding goods in processIndirect laborBeginning goods in process	EUP	EUP	EUP
(Click to select)Units of beginning goods in processUnits of ending goods in processDirect laborDirect materialsBeginning goods in process	EUP	EUP	EUP
Equivalent units of production	EUP	EUP	EUP

  

Cost per EUP	Direct Materials			Direct Labor			Factory Overhead
(Click to select)Cost of ending goods in processUnits of ending goods in processUnits of beginning goods in processFactory overheadCost of beginning goods in process	$			$			$
(Click to select)Costs incurred this periodIndirect materialsUnits of ending goods in processUnits of begininng goods in processDirect materials
Total costs	$			$			$
(Click to select)Units ended this periodEquivalent units of productionUnits of begining goods in processUnits started this periodUnits of ending goods in process			EUP			EUP			EUP
Cost per EUP	$		Per EUP	$		Per EUP	$		Per EUP

   

Cost assignment and reconciliation
Costs transferred out
(Click to select)Direct laborFactory overheadIndirect materialsDirect materialsIndirect labor	$
(Click to select)Indirect materialsFactory overheadDirect materialsIndirect laborDirect labor
(Click to select)Factory overheadIndirect laborDirect laborDirect materialsIndirect materials
		$
Costs of ending goods in process
(Click to select)Indirect materialsIndirect laborFactory overheadDirect laborDirect materials	$
(Click to select)Indirect materialsFactory overheadDirect laborIndirect laborDirect materials
(Click to select)Direct materialsIndirect laborIndirect materialsDirect laborFactory overhead
Total costs to account for		$

Answer 1