Question

Required information [The following information applies to the questions displayed below.] Pro-Weave manufactures stadium blankets by passing the products through a weaving department and a sewing department. The following information is available regarding its June inventories: Raw materials inventory Work in process inventory-Weaving Work in process inventory-Sewing Finished goods inventory Beginning Inventory $ 176,000 385,000 700,000 1,286,000 Ending Inventory $ 201,000 360,000 905,000 1,256,000 The following additional information describes the company's manufacturing activities for June: $ 545,000 3,500,000 188,000 $ 262,000 84,000 166,000 Raw materials purchases (on credit) Factory payroll cost (paid in cash) Other factory overhead cost (Other Accounts credited) Materials used Direct-Weaving Direct-Sewing Indirect Labor used Direct-Weaving Direct-Sewing Indirect Overhead rates as a percent of direct labor Weaving Sewing Sales (on credit) $1,350,000 380,000 1,550,000 90% 160% $5,050,000

Answer 1

1.

(a)	Sewing	2852000
(b)	Finished Goods	3719000
(c)	Cost of goods sold	3749000

Working:

Raw Materials Inventory
Beg. Bal.	176000
(a)	545000	346000	(b)
		166000	(c)
End. Bal.	201000
Work in Process-Weaving Department
Beg. Bal.	385000
(b)	262000	2852000	Sewing
(d)	1350000
(g)	1215000
End. Bal.	360000
Work in Process-Sewing Department
Beg. Bal.	700000
(b)	84000	3719000	Finished
(d)	380000
(g)	608000
Weaving	2852000
End. Bal.	905000
Finished Goods Inventory
Beg. Bal.	1286000
Sewing	3719000	3749000	COGS
End. Bal.	1256000

Important Note: The data provided for raw materials inventory account does tally.

Beginning balance $176000 + Purchases $545000 - Direct material issued $346000 - Indirect material issued $166000 = Ending balance $209000. However, the ending balance given in the question is $201000. Kindly re-check.

2.

Date	General Journal	Debit	Credit
June 30	Work in process inventory-Sewing	2852000
	Work in process inventory-Weaving		2852000
	(To record goods transferred from weaving to sewing department)
June 30	Finished goods inventory	3719000
	Work in process inventory-Sewing		3719000
	(To record goods completed and transferred to finished goods)
June 30	Accounts receivable	5050000
	Sales revenue		5050000
	(To record sales on account)
June 30	Cost of goods sold	3749000
	Finished goods inventory		3749000
	(To record the cost of sales)

Transaction	General Journal	Debit	Credit
(a)	Raw materials inventory	545000
	Accounts payable		545000
	(To record materials purchased on account)
(b)	Work in process inventory-Weaving	262000
	Work in process inventory-Sewing	84000
	Raw materials inventory		346000
	(To record direct materials usage)
(c)	Factory overhead	166000
	Raw materials inventory		166000
	(To record indirect materials usage)
(d)	Work in process inventory-Weaving	1350000
	Work in process inventory-Sewing	380000
	Factory wages payable		1730000
	(To record direct labor usage)
(e)	Factory overhead	1550000
	Factory wages payable		1550000
	(To record indirect labor usage)
(f)	Factory overhead	188000
	Other Accounts		188000
	(To record the cost of other overhead)
(g)	Work in process inventory-Weaving	1215000
	(90% x $1350000)
	Work in process inventory-Sewing	608000
	(160% x $380000)
	Factory overhead		1823000
	(To record the application of overhead)
(h)	Factory wages payable	3500000
	Cash		3500000
	(To record payment of total factory payroll)

The total labor used is $1350000 + $380000 + $1550000 = $3280000. However, in the question it is mentioned Factory payroll cost (paid in cash) $3500000 hence entry (h) is prepared for $3500000. Kindly re-check.