Question

Sweeties, Inc., manufactures a sugar product by a continuous process, involving three production departments-Refining, Sifting, and Packing. Assume that records indicate that direct materials, direct labor, and applied factory overhead for the first department, Refining, were $360,000, $147,000, and $96,400, respectively. Also, work in process in the Refining Department at the beginning of the period totaled $32,000, and work in process at the end of the period totaled $28,200.

Required:

a.	(1) On September 30, journalize the entry to record the flow of costs into the Refining Department during the period for direct materials.* (2) On September 30, journalize the entry to record the flow of costs into the Refining Department during the period for direct labor.* (3) On September 30, journalize the entry to record the flow of costs into the Refining Department during the period for factory overhead.*
b.	On September 30, journalize the entry to record the transfer of production costs to the second department, Sifting.*
	*Refer to the Chart of Accounts for exact wording of account titles.

CHART OF ACCOUNTS
Sweeties, Inc.
General Ledger
ASSETS 110 Cash 121 Accounts Receivable 125 Notes Receivable 126 Interest Receivable 131 Materials 141 Work in Process-Refining 142 Work in Process-Sifting 143 Work in Process-Packing 151 Factory Overhead-Refining 152 Factory Overhead-Sifting 153 Factory Overhead-Packing 161 Finished Goods 171 Supplies 172 Prepaid Insurance 173 Prepaid Expenses 181 Land 191 Factory 192 Accumulated Depreciation-Factory LIABILITIES 210 Accounts Payable 221 Utilities Payable 231 Notes Payable 236 Interest Payable 251 Wages Payable EQUITY 311 Common Stock 340 Retained Earnings 351 Dividends 390 Income Summary	REVENUE 410 Sales 610 Interest Revenue EXPENSES 510 Cost of Goods Sold 520 Wages Expense 531 Selling Expenses 532 Insurance Expense 533 Utilities Expense 534 Supplies Expense 540 Administrative Expenses 561 Depreciation Expense-Factory 590 Miscellaneous Expense 710 Interest Expense

a(1). On September 30, journalize the entry to record the flow of costs into the Refining Department during the period for direct materials. Refer to the Chart of Accounts for exact wording of account titles.

PAGE 10

JOURNAL

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT
1
2

a(2). On September 30, journalize the entry to record the flow of costs into the Refining Department during the period for direct labor. Refer to the Chart of Accounts for exact wording of account titles.

PAGE 10

JOURNAL

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT
1
2

a(3). On September 30, journalize the entry to record the flow of costs into the Refining Department during the period for factory overhead. Refer to the Chart of Accounts for exact wording of account titles.

PAGE 10

JOURNAL

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT
1
2

b. On September 30, journalize the entry to record the transfer of production costs to the second department, Sifting. Refer to the Chart of Accounts for exact wording of account titles.

Answer 1

a) Journal entry :

Date accounts & explanation debit credit

30-Sep Work in process-Refining $360,000

Direct material $360,000

(To record direct material)

30-Sep Work in process-Refining $147,000

Wages payable $147,000

(To record direct labour)

30-Sep Work in process-refining $96,400

Factory overhead $96,400

(To record overhead applied)

b) Journal entry :

Date accounts & explanation debit credit

Work in process-Sifting 607200

Work in process-refining 607200

(To record transferred goods from refining to sifting)

Direct material $360,000

wages $147,000

Factoryoverhead $96,400

add: opening WIP 32000

less: closing WIP -28200

WIP Shifting $607,200