Entries for Process Cost System Preston & Grover SoapCompany manufactures powdered detergent. Phosphate is placed inprocess in the Making Department, where it is turned intogranulars. The output of Making is transferred to the PackingDepartment, where packaging is added at the beginning of theprocess. On July 1, Preston & Grover Soap Company had thefollowing inventories: Finished Goods $9,720 Work in Process—Making3,780 Work in Process—Packing 4,920 Materials 2,130 Departmentalaccounts are maintained for factory overhead, which both have zerobalances on July 1. Manufacturing operations for July aresummarized as follows: a. Materials purchased on account $121,030b. Materials requisitioned for use: Phosphate—Making Department$79,950 Packaging—Packing Department 27,810 Indirectmaterials—Making Department 3,130 Indirect materials—PackingDepartment 1,120 c. Labor used: Direct labor—Making Department$57,120 Direct labor—Packing Department 38,550 Indirectlabor—Making Department 11,060 Indirect labor—Packing Department19,830 d. Depreciation charged on fixed assets: Making Department$10,430 Packing Department 8,610 e. Expired prepaid factoryinsurance: Making Department $1,980 Packing Department 790 f.Applied factory overhead: Making Department $27,260 PackingDepartment 30,110 g. Production costs transferred from MakingDepartment to Packing Department $164,790 h. Production coststransferred from Packing Department to Finished Goods $259,360 i.Cost of goods sold during the period $260,310 Required: 1.Journalize the entries to record the operations, identifying eachentry by letter. For a compound transaction, if an amount box doesnot require an entry, leave it blank. Item Account Debit Credit a.b. c. d. e. f. g. h. i. 2. Compute the July 31 balances of theinventory accounts. Materials $ Work in Process—Making Department $Work in Process—Packing Department $ Finished Goods $ 3. Computethe July 31 balances of the factory overhead accounts. FactoryOverhead—Making Department $ Factory Overhead—Packing Department$
