Forest Components makes aircraft parts. The followingtransactions occurred in July.
Purchased $16,960 of materials on account.
Issued $16,790 in direct materials to the productiondepartment.
Issued $1,290 of supplies from the materials inventory.
Paid for the materials purchased in transaction (1) usingcash.
Returned $2,020 of the materials issued to production in (2) tothe materials inventory.
Direct labor employees earned $32,300, which was paid incash.
Purchased miscellaneous items for the manufacturing plant for$17,330 on account.
Recognized depreciation on manufacturing plant of $36,200.
Applied manufacturing overhead for the month.
Forest uses normal costing. It applies overhead on the basis ofdirect labor costs using an annual, predetermined rate. At thebeginning of the year, management estimated that direct labor costsfor the year would be $435,000. Estimated overhead for the year was$430,650.
The following balances appeared in the inventory accounts ofForest Components for July.
| Beginning | Ending |
| Materials Inventory | | ? | | $ | 12,510 |
| Work-in-Process Inventory | | ? | | | 10,550 |
| Finished Goods Inventory | $ | 2,670 | | | 6,910 |
| Cost of Goods Sold | | ? | | | 73,700 |
|
Required:
a. Prepare journal entries to record thesetransactions.
b. Prepare T-accounts to show the flow of costsduring the period from Materials Inventory through Cost of GoodsSold.
