Question

Process costing system Eminence Corporation makes rocking chairs. The chairs move through two departments during production. Lumber is cut into chair parts in the cutting department, which transfers the parts to the assembly department for completion. The company sells the unfinished chairs to hobby shops. The following transactions apply to Eminence's operations for its first year, 2018. (Assume that all transactions are for cash unless otherwise stated.) 1. The company was started when it acquired a $47,000 cash contribution from the owners. 2. The company purchased $15,000 of direct raw materials and $400 of indirect materials. Indirect materials are capitalized in the Production Supplies account. 3. Direct materials totaling $7,000 were issued to the cutting department. 4. Labor cost was $28,200. Direct labor for the cutting and assembly departments was $10,000 and $13,000, respectively. Indirect labor costs were $5,200. 5. The predetermined overhead rate was $0.50 per direct labor dollar in each department. 6. Actual overhead costs other than indirect materials and indirect labor were $6,400 for the year. 7. The cutting department transferred $12,500 of inventory to the assembly department. 8. The assembly department transferred $20,500 of inventory to finished goods. 9. The company sold inventory costing $18,500 for $30,000. 10. Selling and administrative expenses were $3,000.

Answer 1

cash aonen's aptas 47000 2 ut000 1 30,000 28200 3,000 End End Ba 24,000 0th Production supples Raco maHoials 3 71000 IS000 2 300 End Ba End Bal 8,000 00 onic-Assemy eo work in press-catigDetnt 20,J00 8 13,000 12 oo 4 7000 6,S00 10,000 200 o00 End Bal OS'b inished Goody monutockotigovorhead 800 9 20S00 S200 6 1,S00 400 CLEn Guoo 100 Ena 2000 Eng Lal 0 Bal

(2 Cast of Goads sold saes Revenue 30 000 CL Enlay Pncome 30,000 ч0 Sumnny Tncome Summany 18900 End Bal End Bal sellng and AdinstaaveExpense 3.000 Tnome Tnome summ cast of 90ad's Sold 8,900 30,000 SAE 3000 Sales Revenue 3,000 ŚCmma Engal End Ba 0 8,100

cast of Gaads manelaed schedule Fon the Year 2012 3000 DRZect matezals 23,000 Digect labo1 1,Soo manifacthaoolead applied TOtal caspient acafectiag costs Add Beginnin a2onk n Piccess Pcess Total cost of womk n LessEnding ok n Pcess 21, 000 Cast af goods manufacliored Add Beginin inished Aoods 20,S00 st of cads avialable Fon Sale 20100 Less ndig Einished foods 2000 unaduted ost of Socds sold Addundetapplied manulacleofead 18s00 AdJusted ost of goody sold $ 18,900 .Tam Tnome stalement Con-the yecon Ended 201 le১ 36,000 cast of cad sold GYass Paft seliing and adninislaeeypese Net income 18,900 11,0o 3,000 8,100

Ralance sheet 2018 Assets cash 241000 Pacr matenfalS Production Supplies 01 १n Prc৫ Finished &000 i00 21000 Ads 2,000 Ttal asses 1१cb1१ics avd aones opa। oaners Caplal Relained caaning TOtal habtties and ooner'scapla 8100 00