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 $ 198,000 415,000 710,000 1,386,000 Ending Inventory $ 285,000 400,000 920,000 1,446,000 The following additional information describes the company's manufacturing activities for June: $ 590,000 3,405,000 184,000 $ 242,000 99,000 134,000 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) $1,300,000 455,000 1,650,000 85% 170% $5,100,000 1. Compute the (a) cost of products transferred from weaving to sewing, (b) cost of products transferred from sewing to finished goods, and (c) cost of goods sold. 2. Prepare journal entries dated June 30 to record (a) goods transferred from weaving to sewing, (b) goods transferred from sewing to finished goods, (c) sale of finished goods, and (d) cost of goods sold.

Answer 1

Solution 1:
Pro-Weave Manufacturer
Cost of products transferred from weaving to sewing
Particulars	Amount
Raw material used in Weaving	$242,000.00
Direct Labor - Weaving	$1,300,000.00
Manufacturing overhead Applied - Weaving (85% of DL)	$1,105,000.00
Cost Incurred during the period in production	$2,647,000.00
Add: Opening WIP	$415,000.00
Less: ending WIP	$400,000.00
Cost of goods transferred from Weaving to Sewing	$2,662,000.00

Pro-Weave Manufacturer
Cost of products transferred from Sewing to Finished Goods
Particulars	Amount
Cost of goods transferred from Weaving	$2,662,000.00
Raw material used in Sewing	$99,000.00
Direct Labor - Sewing	$455,000.00
Manufacturing overhead Applied - Weaving (170% of DL)	$773,500.00
Cost Incurred during the period in production	$3,989,500.00
Add: Opening WIP	$710,000.00
Less: ending WIP	$920,000.00
Cost of goods manufactured and transferred to finished goods	$3,779,500.00

Pro-Weave Manufacturer
Schedule of cost of goods Sold
Particulars	Amount
Beginning finished goods inventory	$1,386,000.00
Add: Cost of goods manufactured	$3,779,500.00
Less: ending finished goods inventory	$1,446,000.00
Cost of goods sold	$3,719,500.00

Solution 2:
Journal Entries - Pro-Weave Manufacturer
Event	Particulars	Debit	Credit
a	Work in Process - Sewing Department Dr	$2,662,000.00
	To Work in process - Weaving Department		$2,662,000.00
	(To cost of completed units in weaving transferred to Sewing department)
b	Finished Goods Inventory Dr	$3,779,500.00
	To Work in process - Sewing Department		$3,779,500.00
	(To cost of completed units in sewing transferred to finished goods)
c-1	Accounts receivables Dr	$5,100,000.00
	To Sales Revenue		$5,100,000.00
	(To record sale finished goods)
c-2	Cost of goods sold Dr	$3,719,500.00
	To Finished goods inventory		$3,719,500.00
	(Being cost of inventory sold transferred to COGS)