Question

apter 4 ems Help Save &Exit Submit Lubricants, Inc., produces a special kind of grease that is widely used by race car dinvers The grease is produced in two departments Refining and Blending. Raw materials are introduced at various points in the Refining Department 34,50 Completed and transferred to Blending Materials Direct labor 154,680 71,200 Print March 31 balance The March 1 work in process inventory in the Refining Department consists of the following elements materials, $8,800, direct labor, $4100, and overhead, $21,600. Costs incurred during March in the Blending Department were: materials used $44 applied to production, $110,000 .000 direct labor, $16,000, and overhead cost 1. Prepare journal entries to record the costs incurred in both the Refining Department and Blending Department your entries to the items (a) through (g) below a. Raw materials used in production b. Direct labor costs incurred. c. Manufacturing overhead costs incurred for the entire factory, $616.000 (Credit Accounts Payable) d. Manufacturing overhead was applied to oroduction using a predetermined overhead rate. 945 PM e here to search hp

Answer 1

Answer:

Solution 1:
Journal Entries - Lubricants Inc.
Event	Particulars	Debit($)	Credit($)
a1	Work In Process - Refining Department Dr	1,54,600
	To Raw Materials		1,54,600
	(Being raw material used in production)
a2	Work In Process - Blending Department Dr	44,000
	To Raw Materials		44,000
	(Being raw material used in production)
b1	Work In Process - Refining Department Dr	71,200
	To Cash		71,200
	(To record direct labor cost incurred)
b2	Work In Process - Blending Department Dr	16,000
	To Cash		16,000
	(To record direct labor cost incurred)
c	Manufacturing overhead Dr	6,16,000
	To Accounts payable		6,16,000
	(To record manufacturing overhead incurred)
d1	Work In Process - Refining Department Dr	4,78,000
	To Manufacturing overhead		4,78,000
	(To record manufacturing overhead applied)
d2	Work In Process - Blending Department Dr	1,10,000
	To Manufacturing overhead		1,10,000
	(To record manufacturing overhead applied)
e	Work In Process - Blending Department Dr	6,42,000
	To Work In Process - Refining Department		6,42,000
	(Being goods completed transferred to blending from refining)
f	Finished goods inventory Dr	7,20,000
	To Work In Process - Blending Department		7,20,000
	(Being goods completed transferred to finished goods)
g1	Accounts receivables Dr	13,90,000
	To Sales Revenue		13,90,000
	(To record sales revenue)
g2	Cost of goods sold Dr	6,30,000
	To Finished goods inventory		6,30,000
	(To record COGS)

Solution 2:
Accounts Receivables
Particulars	Debit($)	Particulars	Credit($)
Beginning Balance	$0.00
Sales revenue	13,90,000
Ending balance	13,90,000
Work In Process - Refining Department
Particulars	Debit($)	Particulars	Credit($)
Beginning Balance	34,500	Work In Process - Blending	6,42,000
Materials	1,54,600
Direct labor	71,200
Manufacturing overhead	4,78,000
Ending Balance	96,300
Raw Materials
Particulars	Debit($)	Particulars	Credit($)
Beginning Balance	2,04,600	Work In Process - Refining	1,54,600
		Work In Process - Blending	44,000
Ending balance	6,000
Work In Process - Blending Department
Particulars	Debit($)	Particulars	Credit($)
Beginning Balance	57,000	Finished goods inventory	7,20,000
Materials	44,000
Direct labor	16,000
Manufacturing overhead	1,10,000
Work In Process - Refining	6,42,000
Ending balance	1,49,000
Finished goods
Particulars	Debit($)	Particulars	Credit($)
Beginning Balance	13,000	Cost of goods sold	6,30,000
Work In Process - Blending	7,20,000
Ending balance	1,03,000
Manufacturing overhead
Particulars	Debit($)	Particulars	Credit($)
Accounts Payable	6,16,000	Work In Process - Refining	4,78,000
		Work In Process - Blending	1,10,000
Ending balance	28,000
Sales Revenue
Particulars	Debit($)	Particulars	Credit($)
		Accounts receivables	13,90,000
		Ending balance	13,90,000
Cost of goods sold
Particulars	Debit($)	Particulars	Credit($)
Finished goods	6,30,000
Ending balance	6,30,000