Question

Lubricants, Inc., produces a special kind of grease that is widely used by race car drivers. The grease is produced in two processing departments: Refining and Blending. Raw materials are introduced at various points in the Refining Department. The following incomplete Work in Process account is available for the Refining Department for March: Work in Process-Refining Department Completed and transferred to Blending March 1 balance Materials Direct labor Overhead 31,900 145,600 81,200 483,000 March 31 balance The March 1 work in process inventory in the Refining Department consists of the following elements: materials, $7,900; direct labor, $3,500; and overhead, $20,500. Costs incurred during March in the Blending Department were: materials used, $45,000; direct labor, $16,400; and overhead cost applied to production, $118,000. Required: 1. Prepare journal entries to record the costs incurred in both the Refining Department and Blending Department during March. (If no entry is required for a transaction/event, select "No journal entry required in the first account field.) a. Raw materials were issued for use in production. b. Direct labor costs were incurred. c. Manufacturing overhead costs for the entire factory were incurred, $676,000. (Credit Accounts Payable.) d. Manufacturing overhead cost was applied to production using a predetermined overhead rate. e. Units that were complete with respect to processing in the Refining Department were transferred to the Blending Department, $672,000. f. Units that were complete with respect to processing in the Blending Department were transferred to Finished Goods, $710,000. g. Completed units were sold on account, $1,450,000. The Cost of Goods Sold was $600,000.

Answer 1

Lubricants, Inc.

1.

Transactions	General Journal	Debit	Credit
a.	Work in process-Refining department	145600
	Work in process-Blending department	45000
	Raw Materials		190600
	(To record direct materials used in production)
b.	Work in process-Refining department	81200
	Work in process-Blending department	16400
	Salaries and Wages payable		97600
	(To record direct labor costs incurred)
c.	Manufacturing overhead	676000
	Accounts Payable		676000
	(To record manufacturing overhead incurred)
d.	Work in process-Refining department	483000
	Work in process-Blending department	118000
	Manufacturing overhead		601000
	(To record manufacturing overhead applied)
e.	Work in process-Blending department	672000
	Work in process-Refining department		672000
	(To record transfers from Refining to Blending department)
f.	Finished goods	710000
	Work in process-Blending department		710000
	(To record goods completed and transferred to finished goods)
g(1).	Accounts receivable	1450000
	Sales		1450000
	(To record sales on account)
g(2).	Cost of goods sold	600000
	Finished goods		600000
	(To record cost of sales)

2.

Accounts Receivable					Raw Materials
	Debit	Credit				Debit	Credit
g(1).	1450000				Beg. Bal.	205600
							190600	a.
End. Bal.	1450000				End. Bal.	15000
Work in Process-Refining Department					Work in Process-Blending Department
	Debit	Credit				Debit	Credit
Beg. Bal.	31900				Beg. Bal.	42000
a.	145600	672000	e.		a.	45000	710000	f.
b.	81200				b.	16400
d.	483000				d.	118000
					e.	672000
End. Bal.	69700				End. Bal.	183400
Finished Goods					Manufacturing Overhead
	Debit	Credit				Debit	Credit
Beg. Bal.	25000				c.	676000	601000	d.
f.	710000	600000	g(2).
End. Bal.	135000				End. Bal.	75000
Accounts Payable					Salaries and Wages Payable
	Debit	Credit				Debit	Credit
		676000	c.				97600	b.
End. Bal.		676000			End. Bal.		97600
Sales					Cost of Goods Sold (COGS)
	Debit	Credit				Debit	Credit
		1450000	g(1).		g(2).	600000
End. Bal.		1450000			End. Bal.	600000

Per HOMEWORKLIB RULES the first question has been answered. Please post each of the remaining independent questions separately. Thank you.