Question

Two Departments, Journal Entries with Supporting Calculations-Weighted Average Method Patterson Laboratories, Inc., produces one of its products in two successive departments. All materials are added at the beginning of the process in Department 1, no materials are used in Department 2. Conversion costs are incurred evenly in both departments. Patterson uses the weighted average method for process costing. January 1, 2019, inventory account balances are as follows: Materials inventory $30,000 Work in process Department 1 (3,000 units, 30% complete) Direct material 4,560 Conversion costs 10,640 Work in process Department 2 (3,550 units, 40% complete) 43,439 Finished goods inventory (2,000 units @ $16) 32,000 During January, the following transactions occurred: 1. Purchased material on account, $90,000 2. Placed $84,000 of material into process in Department 1. This $84,000 represents 24,000 units of materials. 3. Distributed total payroll costs: $108,116 of direct labor to Department 1, $62,700 of direct labor to Department 2, and $51,000 of indirect labor to Manufacturing Overhead. 4. Incurred other actual manufacturing overhead costs $81,000. (Credit Other Accounts.) 5. Applied overhead to the two processing departments: $88,000 to Department 1 and $43,900 to Department 2 6. Transferred 25,000 completed units from Department 1 to Department 2. The 2,000 units remaining in Department 1 were 20% completed with respect to conversion costs. 7. Transferred 26,000 completed units from Department 2 to finished goods inventory. The 2,550 units remaining in Department 2 were 70% completed with respect to conversion costs. 8. Sold 20,000 units on account at $27 per unit. Patterson uses weighted average inventory costing procedures for the finished goods inventory.

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Answer 1

a) Joumal entries as follows: Debit Credit Date Account Title January Material inventory Accounts payable (To record the purchase of material) $90,000 $90,000 WIP-Department 1 Material inventory (To record the usage of material) $84,000 S84,000 |WIP-Department 1 WIP-Department 2 Manufacturing overhead Wages payable (To record wage expense) 3 $108,116 $62,700 $51,000 $221,816 Manufacturing overhead 4 $81,000 Other accounts S81,000 (To record manufacturing overhead)

WIP-Department 1 WIP-Department 2 Manufacturing overhead (To record the transfer of goods) S8,000 $43,900 $131,900 WIP-Department 2 WIP-Department 1 (To record the transfer) $285,500 S285,500 Finished goods $425,900 WIP-Department 2 (To record the transfer of goods) $425,900 Accounts receivable S540,000 $540,000 Sales (To record the sales) COGS $327,615 $327,615 Inventory (To record the COGS)