Preston & Grover Soap Company manufactures powdered detergent. Phosphate is plac
ID: 2525505 • Letter: P
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 $28,170 Work in Process—Making 10,950 Work in Process—Packing 14,270 Materials 6,180 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 $350,830 b. Materials requisitioned for use Phosphate—Making Department $231,750 Packaging—Packing Department 80,610 Indirect materials—Making Department 9,070 Indirect materials—Packing Department 3,250 c. Labor used Direct labor—Making Department $165,570 Direct labor—Packing Department 111,750 Indirect labor—Making Department 32,060 Indirect labor—Packing Department 57,480 d. Depreciation charged on fixed assets Making Department $30,230 Packing Department 24,960 e. Expired prepaid factory insurance Making Department $5,730 Packing Department 2,290 f. Applied factory overhead Making Department $79,010 Packing Department 87,290 g. Production costs transferred from Making Department to Packing Department $477,690 h. Production costs transferred from Packing Department to Finished Goods $751,810 i. Cost of goods sold during the period $754,560 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 350,830 Accounts Payable 350,830 b. Work in Process-Making Department 231,750 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
Explanation / Answer
Answer 1. Journal Entry Date Particulars Dr. Amt. Cr. Amt. a. Materials 350,830.00 Accounts Payable 350,830.00 b. WIP - Making Department 231,750.00 WIP - Packing Department 80,610.00 Factory Overhead - Making Department 9,070.00 Factory Overhead - Packing Department 3,250.00 Materials 324,680.00 c. WIP - Making Department 165,570.00 WIP - Packing Department 111,750.00 Factory Overhead - Making Department 32,060.00 Factory Overhead - Packing Department 57,480.00 Wages Payable 366,860.00 d. Factory Overhead - Making Department 30,230.00 Factory Overhead - Packing Department 24,960.00 Accumulated Depreciation 55,190.00 e. Factory Overhead - Making Department 5,730.00 Factory Overhead - Packing Department 2,290.00 Prepaid Insurance 8,020.00 f. WIP - Making Department 79,010.00 WIP - Packing Department 87,290.00 Factory Overhead - Making Department 79,010.00 Factory Overhead - Packing Department 87,290.00 g. WIP - Packing Department 477,690.00 WIP - Making Department 477,690.00 h. Finished Goods 751,810.00 WIP - Packing Department 751,810.00 i. Cost of Goods Sold 754,560.00 Finished Goods 754,560.00 Answer 2 & 3. Materials WIP - Making Department WIP - Packing Department Beg. Bal. 6,180.00 324,680.00 b. Beg. Bal. 10,950.00 477,690.00 g. Beg. Bal. 14,270.00 751,810.00 h. a. 350,830.00 b. 231,750.00 b. 80,610.00 c. 165,570.00 c. 111,750.00 f. 79,010.00 f. 87,290.00 g. 477,690.00 End. Bal. 32,330.00 End. Bal. 9,590.00 End. Bal. 19,800.00 Factory Overhead - Making Department Factory Overhead - Packing Department Finished Goods Beg. Bal. - 79,010.00 f. Beg. Bal. - 87,290.00 f. Beg. Bal. 28,170.00 754,560.00 i. b. 9,070.00 b. 3,250.00 h. 751,810.00 c. 32,060.00 c. 57,480.00 d. 30,230.00 d. 24,960.00 e. 5,730.00 e. 2,290.00 End. Bal. (1,920.00) End. Bal. 690.00 End. Bal. 25,420.00
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