Question

Re-Tire produces bagged mulch made from recycled tires. Production involves shredding tires and packaging the pieces for sale in the bagging department. All direct materials enter in the first process. The following describes production operations for October Direct materials used Direct labor used 358 in Shredding: 658 in Bagging. Predetermined overhead rate based on direct labor) Transferred to Bagging Transferred to finished goods $222,000 $145,000 $201,500 $582,000 1856 The company's revenue for the month totaled $430,000 from credit sales, and its cost of goods sold for the month is $244,000. Prepare summary Journal entries dated October 31 to record its October production activities for (1) direct materials usage. (2) direct labor incurred (3) overhead applied (4) goods transfer from Shredding to Bagging, (5) goods transfer from Bagging to finished goods, (6) credit sales, and (7) cost of goods sold. View transaction list Journal entry worksheet 2 3 4 1 5 6 7 > Record direct materials used in production Note: Enter debits before credits

Answer 1

S.No	Particulars	Debit	Credit
1	Work in process - Shredding Dr	$2,22,000
	To Raw material Inventory		$2,22,000
	(Raw material used in production)
2	Work in process - Shredding Dr (145000*35%)	$50,750
	Work in process - bagging Dr (145000*65%)	$94,250
	To Factory Wages		$1,45,000
	(Direct Labor used in production)
3	Work in process - Shredding Dr (50750*185%)	$93,887
	Work in process - bagging Dr (94250*185%)	$174,362
	To Factory Overhead		$268,250
	(Overhead applied to production)
4	Work in process - bagging Dr	$2,01,500
	To Work in process - Shredding		$2,01,500
	(Transferred of Goods from Shredding to Bagging recorded)
5	Finished Goods Inventory Dr	$5,82,000
	To Work in process - Bagging		$5,82,000
	(Transferred of Finished Goods from Bagging recorded)
6	Accounts Receivable Dr	$4,30,000
	To Sales of Goods		$4,30,000
	(Sale of goods recorded on account)
7	Cost of Goods Sold Dr	$2,44,000
	To Finished Goods Inventory		$2,44,000
	(Cost of Goods Sold recorded)