Entries for Process Cost System
Preston & Grover Soap Company manufactures powdereddetergent. Phosphate is placed in process in the Making Department,where it is turned into granulars. The output of Making istransferred to the Packing Department, where packaging is added atthe beginning of the process. On July 1, Preston & Grover SoapCompany had the following inventories:
| Finished Goods | $30,010 |
| Work in Process—Making | 11,660 |
| Work in Process—Packing | 15,200 |
| Materials | 6,590 |
Departmental accounts are maintained for factory overhead, whichboth have zero balances on July 1.
Manufacturing operations for July are summarized as follows:
| a. | Materials purchased on account | $373,810 |
| b. | Materials requisitioned for use: | |
| | Phosphate—Making Department | $246,930 |
| | Packaging—Packing Department | 85,890 |
| | Indirect materials—Making Department | 9,660 |
| | Indirect materials—Packing Department | 3,460 |
| c. | Labor used: | |
| | Direct labor—Making Department | $176,410 |
| | Direct labor—Packing Department | 119,070 |
| | Indirect labor—Making Department | 34,160 |
| | Indirect labor—Packing Department | 61,240 |
| d. | Depreciation charged on fixed assets: | |
| | Making Department | $32,210 |
| | Packing Department | 26,600 |
| e. | Expired prepaid factory insurance: | |
| | Making Department | $6,100 |
| | Packing Department | 2,440 |
| f. | Applied factory overhead: | |
| | Making Department | $84,180 |
| | Packing Department | 93,010 |
| g. | Production costs transferred from Making Departmentto Packing Department | $508,980 |
| h. | Production costs transferred from PackingDepartment to Finished Goods | $801,050 |
| i. | Cost of goods sold during the period | $803,980 |
Required:
1. Journalize the entries to record theoperations, identifying each entry by letter. For a compoundtransaction, if an amount box does not require an entry, leave itblank.
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2. Compute the July 31 balances of theinventory accounts.
| Materials | $ |
| Work in Process—Making Department | $ |
| Work in Process—Packing Department | $ |
| Finished Goods | $ |
3. Compute the July 31 balances of the factoryoverhead accounts.
| Factory Overhead—Making Department | $ | |
| Factory Overhead—Packing Department | $ | |
