50.1K

Verified Solution

Link Copied!

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:

Finished Goods	$22,140
Work in ProcessMaking	8,600
Work in ProcessPacking	11,210
Materials	4,860

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		$275,760
b.	Materials requisitioned for use:
		PhosphateMaking Department	$182,160
		PackagingPacking Department	63,360
		Indirect materialsMaking Department	7,130
		Indirect materialsPacking Department	2,560
c.	Labor used:
		Direct laborMaking Department	$130,140
		Direct laborPacking Department	87,840
		Indirect laborMaking Department	25,200
		Indirect laborPacking Department	45,180
d.	Depreciation charged on fixed assets:
		Making Department	$23,760
		Packing Department	19,620
e.	Expired prepaid factory insurance:
		Making Department	$4,500
		Packing Department	1,800
f.	Applied factory overhead:
		Making Department	$62,100
		Packing Department	68,620
g.	Production costs transferred from Making Department to Packing Department		$375,480
h.	Production costs transferred from Packing Department to Finished Goods		$590,940
i.	Cost of goods sold during the period		$593,100

Required: 1. Journalize the entries to record the operations, identifying each entry by letter. If an amount box does not require an entry, leave it blank. Item Account Debit Credit b. c. d. e. f. g. h. 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 Factory Overhead-Packing Department

Answer & Explanation Solved by verified expert

See Answer