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 Nafining Department March 1 balance 38,000 Completed and transfer to Blending Materiale 495,000 Direct labor 72,000 181,000 March 31 balance eBook The March 1 work in process inventory in the Refining Department consists of the following elements: materials, $25,000; direct labor $4,000, and overhead, $9,000 Costs incurred during March in the Blending Department were materials used, $115,000, direct labor $18,000; and overhead cost applied to production, $42.000 Beforence Required: 1. Prepare journal entries to record the costs incurred in both the Refining Department and Blending Department during March. Key your entries to the items (a) through I below. Raw materials used in production b. Direct labor costs incurred c. Manufacturing overhead costs incurred for the entire factory $225,000 Credit Accounts Payable) d. Manufacturing overhead 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, 5740.000 Units that were complete with respect to processing in the Blending Department were transferred to Finished Goods, $950,000 g. Completed units were sold on account, $1,500,000. The Cost of Goods Sold was $900.000 2. Post the journal entries from above to T-accounts. The following account balances existed at the beginning of March (The beginning balance in the Refining Departmen's Work in Process is given in the Taccount shown above) Work in processlending Department 165.000 Pisished goods 30.000 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare journal entries to record the costs incurred in both the Retning Department and landing Department during March. Key your entries to the items (a) through (o) below. If no antry is required for a transaction/event, select "No journal entry requ i n the first account field.) View transaction Bat Journal entry worksheet S Prov 3 4 5 Next >

Answer 1

Answer-1

Transactions	Account Title and Explanation	Debit ($)	Credit ($)
a.	Work in process-Refining department	495,000
	Work in process-Blending department	115,000
	Raw Materials		610,000
	(To record direct materials used in production)
b.	Work in process-Refining department	72,000
	Work in process-Blending department	18,000
	Salaries and Wages payable		90,000
	(To record direct labor costs incurred)
c.	Manufacturing overhead	225,000
	Accounts Payable		225,000
	(To record manufacturing overhead incurred)
d.	Work in process-Refining department	181,000
	Work in process-Blending department	42,000
	Manufacturing overhead		223,000
	(To record manufacturing overhead applied)
e.	Work in process-Blending department	740,000
	Work in process-Refining department		740,000
	(To record transfers from Refining to Blending department)
f.	Finished goods	950,000
	Work in process-Blending department		950,000
	(To record goods completed and transferred to finished goods)
g.(1)	Accounts receivable	1,500,000
	Sales		1,500,000
	(To record sales on account)
g.(2)	Cost of goods sold	900,000
	Finished goods		900,000
	(To record cost of sales)

2.

Accounts Receivable					Raw Materials
	Debit	Credit				Debit	Credit
g.(1)	1,500,000				Beg. Bal.	618,000
							610,000	a.
End. Bal.	1,500,000				End. Bal.	8,000
Work in Process-Refining Department					Work in Process-Blending Department
	Debit	Credit				Debit	Credit
Beg. Bal.	38,000				Beg. Bal.	65,000
a.	495,000	740,000	e.		a.	115,000	950,000	f.
b.	72,000				b.	18,000
d.	181,000				d.	42,000
					e.	740,000
End. Bal.	46,000				End. Bal.	30,000
Finished Goods					Manufacturing Overhead
	Debit	Credit				Debit	Credit
Beg. Bal.	20,000				c.	225,000	223,000	d.
f.	950,000	900,000	g.(2)
End. Bal.	70,000				End. Bal.	2,000
Accounts Payable					Salaries and Wages Payable
	Debit	Credit				Debit	Credit
		225,000	c.				90,000	b.
End. Bal.		225,000			End. Bal.		90,000
Sales					Cost of Goods Sold (COGS)
	Debit	Credit				Debit	Credit
		1,500,000	g.(1)		g.(2)	900,000
End. Bal.		1,500,000			End. Bal.	900,000