Question

Product Cost Flows Complete the following T-accounts: Hint: The first debit entry in the Manufacturing Overhead T-account relates to indirect materials. Materials Inventory Wages Payable Work in Process 90,000 Inventory 120,000 12,000 119,400 1,800 192,000 30,000 Cost of Goods Sold Finished Goods Inventory 30,000 Manufactured Overhead 1,800 395,400 18,000 162,000 23,400 0

Answer 1

Material Inventory

Beginning Inventory (Bal. fig)	3,000
	120,000	1,800	Manufacturing Overhead A/c
		119,400
	1,800

Wages Payable

		90,000
		4,800	Manufacturing Overhead A/c

Work in Process Inventory

	12,000	383,400	Finidhed Goods A/ c(Cost of Goods Manufactured)
Material Inventory A/c	119,400
Wages Payable A/c	90,000
	192,000
	30,000

Finished Goods Inventory

	30,000	395,400	Cost of goods sold A/C
Work in Process Inventory A/c (Cost of Goods Manufactured) (bal fig)	383,400
	18,000

Manufacturing Overhead

	1,800	192,000	Work in Process Inventory A/c
Wages Payable A/c (bal. fig)	4,800
	162,000
	23,400

Cost of Goods Sold

	395,400

Steps for understanding.

1. Credit of Finished Goods Inventory A/c = Cost of Goods Sold debit (given) = $395,400

2. Close Finished Goods Inventory A/c & the balancing figure represents Cost of Goods Manufactured $383,400.

3. Show Cost of Goods Manufactured of $383,400 to credit of Work in Process Inventory A/c as transfer to Finished goods.

4. $192,000 in Work in Process Inventory A/c represents overhead applied. Thus credit $192,000 to Manufacturing Overhead A/c.

5. $1,800 given in Manufacturing Overhead A/c represents of Material Inventory A/c (given hint in the question) . Thus credit Material Inventory A/c $1,800

6. Close Manufacturing Overhead A/c, & the balancing figure of $4,800 represents Wages Payable. Thus also credit Wages Payable A/ c by $4,800.

7. $119,400 given in Material Inventory A/c & $90,000 Wages Payable A/c represents debit of Work in Process Inventory A/c.

8. Close Material Inventory A/c & the balancing figure of $3,000 represents Beginning Inventory.