Question

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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:

	Beginning Inventory			Ending Inventory
Raw materials inventory	$	162,000		$	209,000
Work in process inventory—Weaving		470,000			435,000
Work in process inventory—Sewing		590,000			790,000
Finished goods inventory		1,376,000			1,426,000

The following additional information describes the company’s manufacturing activities for June:

Raw materials purchases (on credit)	$	605,000
Factory payroll cost (paid in cash)		3,495,000
Other factory overhead cost (Other Accounts credited)		178,000
Materials used
Direct—Weaving	$	268,000
Direct—Sewing		105,000
Indirect		180,000
Labor used
Direct—Weaving	$	1,400,000
Direct—Sewing		495,000
Indirect		1,600,000
Overhead rates as a percent of direct labor
Weaving		80	%
Sewing		155	%
Sales (on credit)	$	4,750,000

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.

(a) Sewing

(b) Finished Goods

(c) Cost of goods sold

Journal entry worksheet

• Record the goods transferred from weaving to sewing.

Note: Enter debits before credits.

	Date General Journal Debit Credit June 30

etc...

Answer 1

General Journal Debit Credit 44 Transaction 45 a) 46 605,000 Raw Material Inventory Accounts Payable 605,000 47 48 b) Work in Process Inventory-Weaving Work in Process Inventory -Sewing Raw Material Inventory 268,000 105,000 49 50 373,000 51 180,000 52 c) 53 Factory Overhead Raw Material Inventory 180,000 54 55 d) Work in Process Inventory-Weaving Work in Process Inventory -Sewing Factory Payroll Payable 1,400,000 495,000 56 57 1,895,000 58 1,600,000 59 e) 60 Factory Overhead Factory Payroll Payable 1,600,000 61 178,000 62 f) 63 Factory Overhead Other Accounts 178,000

65 g) Work in Process Inventory-Weaving (1400000*80%) Work in Process Inventory -Sewing (495000*155%) Factory Overhead 1,120,000 767,250 66 67 1,887,250 68 3,495,000 69 h) 70 Factory Payroll Payable Cash 3,495,000 71 72 73 74 Sewing Department Finished Goods 590,000 1,376,000 105,000 495,000 767,250 1,957,250 75 Weaving Department 470,000 268,000 1,400,000 1,120,000 3,258,000 (435,000) 2,823,000 76 77 Beginning Work in Process Inventory Direct Material used Direct Labor Applied Overheads (1400000*80%),(49500*155%) Net Cost of Weaving Less Ending Balance of Work in Process Inventory-Weaving Manufacturing Cost of Weaving transferred to Sewing Total Cost of Sewing Less Ending Balance of Inventory -Sewing Total Manufacturing Cost of Sewing transferred to Finished Goods Less Ending Balance of Finished Goods Cost of Goods Sold 78 79 80 2,823,000 4,780,250 (790,000) 3,990,250 81 82 83 3,990,250 (1,426,000) 3,940,250 84 85

86 a) 87 b) 88 ) 89 From Weaving to Sewing From Sewing to Finished Goods Cost of Goods Sold 2,823,000 3,990,250 3,940,250 90 91 Debit Credit 92 2,823,000 Date Account Title & Explanation 30-Jun Work in Process Inventory - Sewing Work in Process Inventory - Weaving (To record transfer from weaving to sewing) 93 2,823,000 94 95 96 3,990,250 97 30-Jun Finished Goods Inventory Work in Process Inventory - Sewing (To record transfer of goods to Finished goods) 3,990,250 98 99 100 4,750,000 30-Jun Accounts Receivable Sales Revenue (To record sale of Inventory) 4,750,000 101 102 103) 104 3,940,250 105 30-Jun Cost of Goods Sold Finished Goods Inventory (To record cost of inventory sold) 3,940,250 106