Question

Walters Company manufactures soccer balls in two sequential processes: Cutting and Stitching. All direct materials enter production at the beginning of the Cutting process. The following information is available regarding its May inventories:

	Beginning Inventory			Ending Inventory
Raw materials inventory	$	26,000		$	30,250
Work in process inventory—Cutting		83,500			53,500
Work in process inventory—Stitching		103,300			80,500
Finished goods inventory		60,100			16,250

The following additional information describes the company's production activities for May.

Direct materials
Raw materials purchased on credit	$	45,000
Direct materials used—Cutting		22,750
Direct materials used—Stitching		0

Direct labor
Direct labor—Cutting	$	17,600
Direct labor—Stitching		70,400
Total factory payroll paid (in cash)		143,800

Factory Overhead (Actual costs)
Indirect materials used	$	18,000
Indirect labor used		55,800
Other overhead costs		51,000

Factory Overhead Rates
Cutting	(150% of direct materials used			)
Stitching	(120% of direct labor used			)
Sales	$416,000

Requirement

General Journal

General Ledger

Trial Balance

Raw Materials

Cost of Goods Mfg Cutting

Cost of Goods Mfg Stitching

Cost of Goods Sold

Gross Profit

Verify the ending balance in raw materials inventory. Enter the amount of materials used as negative values.

	Beginning Raw Materials Inventory $26,000 Raw materials purchased 45,000 Materials available for use 71,000 Direct materials used Indirect materials used Ending raw material inventory $71,000

Prepare a schedule of cost of goods manufactured for Walters Company for the month of May.

UnadjustedAdjustedPost-closing

Dates: Apr 30 to: Apr 30

	Direct materials used $0 Direct labor used 70,400 Factory overhead applied 84,480 Total manufacturing costs added during May $154,880 Add: Beginning work in process inventory 103,300 Total cost of work in process 258,180 Less: Ending work in process inventory 80,500 Cost of goods manufactured 177,680

Calculate the value of cost of goods sold for the month of May. Ignore any over- or underapplied overhead in the calculation of cost of goods sold.

Dates: Apr 30 to: Apr 30

	Calculate cost of goods sold: Beginning finished goods inventory $60,100 Cost of goods manufactured Cost of goods available for sale Ending finished goods inventory 16,250 Cost of goods sold $326,005

Answer 1

Beginning raw materials inventory	26000
Raw materials purchased	45000
Materials available for use	71000
Direct materials used	-22750
Indirect materials used	-18000
Ending raw material inventory	30250

Schedule of Cost of Goods Manufactured-Cutting
Direct materials used	22750
Direct labor used	17600
Factory overhead applied (150% x $22750)	34125
Total manufacturing costs added during May		74475
Add: Beginning work in process inventory		83500
Total cost of work in process		157975
Less: Ending work in process inventory		53500
Cost of goods transferred to Stitching		104475

Schedule of Cost of Goods Manufactured-Stitching
Costs transferred in from Cutting	104475
Direct labor used	70400
Factory overhead applied (120% x $70400)	84480
Total manufacturing costs added during May		259355
Add: Beginning work in process inventory		103300
Total cost of work in process		362655
Less: Ending work in process inventory		80500
Cost of goods manufactured		282155

Calculate cost of goods sold:
Beginning finished goods inventory	60100
Cost of goods manufactured	282155
Cost of goods available for sale	342255
Ending finished goods inventory	16250
Cost of goods sold	326005