Zelda Manufacturing organized in June and recorded the following transactions du
ID: 2424624 • Letter: Z
Question
Zelda Manufacturing organized in June and recorded the following transactions during June, its first month of operations:
1) Purchased materials costing $800,000 2) Used direct materials in production costing $485,000 3) Applied direct labor costs of $500,000 to various jobs 4) Applied manufacturing overhead at a rate of $10 per direct labor hours. (Direct labot workers earn $20 per hour) 5) Incurred actual manufacturing overhead costs of $245,000 (credit "Various Accounts") 6) Transferred completed jobs costing $745,000 to finished goods. 7) Sold completed jobs for $1,000,000 on account. The cost applied to the jobs sold totaled $615,000 8) Closed the Manufacturing Overhead account directly to Cost of Goods Sold on June 30.
A) Prepare a journal entry for each of the eight transactions listed above B) Compute the balance of the Cost of Goods Sold account at June 30. C) Determine the company's inventory balances at the end of June
Explanation / Answer
Solution:
1.
Journal Debit Credit 1 Inventory Purchase 800,000 Cash 800,000 2 Work in progress 485,000 Inventory Purchase 485,000 3 WIP inventory 500,000 Direct Labor 500,000 4 WIP inventory 1,000,000 Manufacturing overhead 1,000,000 5 Manufacturing overhead 245,000 Various account 245,000 6 Finished Goods 745,000 WIP Inventory 745,000 7 Accounts Receivable 800,000 Sales 800,000 Cost of Goods Sold 615,000 Finished Goods 615,000Related Questions
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