JHJ Publishing prints one book utilizing two processes, printing and binding The

Question

JHJ Publishing prints one book utilizing two processes, printing and binding The following transactions occurred 1. Purchased raw materials- ink for $900,000 2 Purchased raw materials- paper for $400,000 3. Purchased raw materials - book covers for $50,000 purchasing 50,000 covers at a unit cost of $1 each 4. Transferred $696,000 in ink to WIP-Printing 5. Transferred $360,000 in paper to WIP- Printing 6. Transferred to WIP-Binding 40,000 book covers 7. Direct labor WIP- Printing- $75,000 8. Applied factory overhead WIP- Printing was $20,000 Record the journal entry to transfer completed printed books to work-in- process binding given the following information: 9. Direct Materials Conversion Costs Completed Units Partially Completed Percentage Completed 40,000 10,000 80% 40,000 10,000 75% PROCESS COST ACCOUNTING EQUIVALENT UNITS (EU) CALCULATION CONVERSION DIRECT MATERIALS |COSTS I. UNITS COMPLETED 2-1 PARTIALLY COMPLETED 3· PERCENTAGE COMPLETED 4. PARTIALLY COMPLETED EQUIVALENT 04000 10 D UNITS TOTAL EQUIVALENT UNITS (1 +4) 6. TOTAL COST W.I.P ACCOUNT 7. COST PER EQUIVALENT UNIT (6/5) 8. UNITS TRANSFERRED ?COSTS RANSFERRED (7.8) TOTAL COST TRANSFERRED

Explanation / Answer

As per policy, only one question is allowed to answer at a time, so answering question 1 :

1)

Process cost Equivalent units calculation Direct Materials Conversion costs Total 1 Units completed 40000 40000 2 Partially completed 10000 10000 3 Percentage completed 80% 75% 4 Partially completed equivalent units(2*3) 8000 7500 5 Total equivalent units (1+4) 48000 47500 6 Total Cost WIP Account 1056000 95000 7 Cost per Equivalent unit (6/5) 22 2 8 Units Transferred 40000 40000 9 Costs Transferred (7*8) 880000 80000 10 Total Cost Transferred 960000 Journal Entry: Debit Credit Debit WIP - binding $960,000 Credit WIP - paper $960,000

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