Entries for Process Cost System Preston & Grover Soap Company manufactures powde
ID: 2535718 • 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.
Feedback
1. Remember that there are three different types of inventory; materials, work in process, and finished goods. Each department has a work in process account to track the costs that were accumulated in that department.
2 and 3. Set up T accounts to help determine the balances from the transactions above.
Finished Goods $27,800 Work in Process—Making 10,800 Work in Process—Packing 14,080 Materials 6,100Explanation / Answer
1.
2.
3.
T-accounts
Event Account Title Debit Credit a Raw material 346230 Accounts Payable 346230 b Work-in-process - Making Dept. 228710 Work-in-process - Packing Dept. 79550 Factory Overhead - Making Dept. 8950 Factory Overhead - Packing Dept. 3210 Raw Material 320420 c Work-in-process - Making Dept. 163400 Work-in-process - Packing Dept. 110290 Factory Overhead - Making Dept. 31640 Factory Overhead - Packing Dept. 56730 Wages Payable 362060 d Factory Overhead - Making Dept. 29830 Factory Overhead - Packing Dept. 24630 Accumulated Depreciation 54460 e Factory Overhead - Making Dept. 5650 Factory Overhead - Packing Dept. 2260 Prepaid Insurance 7910 f Work-in-process - Making Dept. 77970 Work-in-process - Packing Dept. 86150 Factory Overhead - Making Dept. 77970 Factory Overhead - Packing Dept. 86150 g Work-in-process - Packing Dept. 471440 Work-in-process - Making Dept. 471440 h Finished goods 741960 Work-in-process - Packing Dept. 741960 i Cost of goods sold 744670 Finished goods 744670Related Questions
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