Question

viana Manufacturing uses a normal cost system and had the following data available for 2018 Direct materials purchased on account $ 75,000 Direct materials requisitioned 45,000 Direct labor cost incurred 70,000 Factory overhead incurred Cost of goods completed Cost of goods sold 90,000 150,000 130,000 Beginning direct materials inventory Beginning WIP inventory Beginning finished goods inventory Overhead application rate, as a percent of direct-labor costs 15,000 32,000 29,000 110 percent 1. Prepare all journal entries needs for 2018 2. Prepare all control accounts cycle to determine the ending inventories and the effect on income statement and balance sheet.

Answer 1

Answer to Q 1

Journal Enteries

						Dr	Cr
Store Ledger Control A/c						75000
	To General Ledger Control A/c						75000
( For Direct	material purchased)
WIP Control A/c						45000
	To Store Ledger Control A/c						45000
(For Direct	Materials requisioned
Wip Control A/c						70000
	To Wages Control A/c						70000
( For Direct La	bour Incurred )
Factory OH Control A/c						90000
	To General Ledger Control A/c						90000
(For Factory	OH incurred)
WIP Control A/c						77000
	To Factory OH Control A/c						77000
( For Factory	OH Applied)
Finished Goods ledger Control A/c						150000
	To WIP Control A/c						150000
( For Cost of	goods completed )
Cost of Sales A/c						130000
	To Finished Goods Ledger Control A/c						130000
( For cost of	goods sold )

Answer to Q 2

		Store Ledger Contriol A/c
Particulars			Amount	Particulars			Amount
To Opening Balance			15000	By WIP Control A/c			45000
To General Ledger Control A/c			75000
				By Closing Balance			45000
			90000				90000
		WIP Control Account
Particulars			Amount	Particulars			Amount
To Opening Balance			32000	By Finished Goods Inventory Control A/c			150000
To Wages Control A/c			70000
To Store Ledger Control A/c			45000
To Factory OH Control A/c			77000
				Closing WIP			74000
			224000				224000
		Finished Goods Inventory Control A/c
Particulars			Amount	Particulars			Amount
To Opening Balance			29000	By Cost of Sales			130000
To WIP Control A/c			150000
				By Closing Balance			49000
			179000				179000
		Cost of Sales Control A/c
Particulars			Amount	Particulars			Amount
To Finished Goods Ledger Control A/c			130000	By Profit and Loss A/c			130000
			130000				130000