Entries for Process Cost System Preston & Grover Soap Company manufactures powde
ID: 2528166 • Letter: E
Question
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:
Departmental accounts are maintained for factory overhead, which both have zero balances on July 1.
Manufacturing operations for July are summarized as follows:
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.
2. Compute the July 31 balances of the inventory accounts.
3. Compute the July 31 balances of the factory overhead accounts. If required, use the minus sign to indicate a credit balance.
Finished Goods $11,440 Work in Process—Making 4,450 Work in Process—Packing 5,790 Materials 2,510Explanation / Answer
Item Account Debit Credit a. Materials 142,480 Accounts payable 142,480 b. work in process-Making Deptt 94,120 work in process-pcking Deptt 32,740 Factory overhead -making Deptt 3,680 Factory overhead -packing Deptt 1,320 Materials 131,860 c. work in process-Making Deptt 67,240 work in process-pcking Deptt 45,380 Factory overhead -making Deptt 13,020 Factory overhead -packing Deptt 23,340 Wages payable 148,980 d. Factory overhead -making Deptt 12,280 Factory overhead -packing Deptt 10,140 Accumulated Depreciation 22,420 e Factory overhead -making Deptt 2,330 Factory overhead -packing Deptt 930 prepaid insurance 3,260 f. work in process-Making Deptt 32,090 work in process-pcking Deptt 35,450 Factory overhead -making Deptt 32,090 Factory overhead -packing Deptt 35,450 g. work in process-packing department 194,000 work in process-making department 194,000 h. finished goods 305,320 work in process-packing department 305,320 i. cost of goods sold 306,440 finished goods 306,440 2) materials 13,130 work in process -Making Department 3,900 work in process-Packing Department 8,040 finished goods 10,320 t-Accounts materials opening 2,510 Requistioned 131,860 purchases 142,480 end bal 13,130 work in process-making deptt opening 4,450 DM 94,120 trfg -packing deptt 194,000 DL 67,240 OH applied 32,090 end bal 3,900 work in process-pcking deptt opening 5,790 trfd making 194,000 DM 32,740 finished goods 305,320 DL 45,380 OH applied 35,450 end bal 8,040 finished goods opening 11,440 cost of goods sold 306,440 WIP-packing 305,320 end bal 10,320 3) Factory overhea-making department 780 Credit Factory overhead -packing department 470 Debit Factory overhead-making department indirect mt 3,680 WIP 32,090 ind lab 13,020 dep 12,280 prepaid 2,330 end bal 780 Factory overhead-packing department indirect mt 1,320 WIP 35,450 ind lab 23,340 dep 10,140 prepaid 930 end bal 470
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