Answer: JOURNAL ENTRIES
No. | Date | Account Title and Explanation | Debit $ | Credit $ |
1 | May 31 | Raw Material invetory | 75,000 | |
Account payable | 75,000 | |||
(Being RM inventory purchased on credit) | ||||
2 | May 31 | Work-in-progress (WIP) - Cutting | 24,250 | |
Raw Material inventory | 24,250 | |||
(Being raw material applied to cutting process) | ||||
3 | May 31 | Factory Overhead | 39,600 | |
Raw Material inventory | 39,600 | |||
(Being indirect material applied to overhead) | ||||
4 | May 31 | Work-in-progress (WIP) - Cutting | 20,600 | |
Work-in-progress (WIP) - Stitching | 82,400 | |||
Factory Payroll payable | 103,000 | |||
(Being labor applied to production) | ||||
5 | May 31 | Factory Overhead | 57,000 | |
Factory Payroll payable | 57,000 | |||
(Being factory payroll applied to overhead) | ||||
6 | May 31 | Factory Payaroll payable | 160,000 | |
Cash | 160,000 | |||
(Being Factory payroll paid) | ||||
7 | May 31 | Factory overhead | 57,000 | |
Other accounts | 57,000 | |||
(Being other overhead costs incurred ) | ||||
8 | May 31 | Work-in-progress (WIP) -Cutting (24,250*150%) | 36,375 | |
Work-in-progress (WIP) -Stitching (82,400*120%) | 98,800 | |||
Factory overhead | 135,255 | |||
(Being overhead applied to production) | ||||
9 | May 31 | Work-in-progress (WIP) -Stitching | 114,225 | |
Work-in-progress (WIP) -Cutting (working 1) | 114,225 | |||
(Being partially completed goods transferred) | ||||
10 | May 31 | Finished Goods Inventory | 367,225 | |
Work-in-progress (WIP) -Stitching (working 2) | 367,225 | |||
(Being finished goods transferred) | ||||
11 | May 31 | Cost of goods sold | 379,075 | |
Finished Goods Inventory (working 3) | 379,075 | |||
(Being COGS booked for sales) | ||||
12 | May 31 | Accounts Receivable | 656,000 | |
Sales revenue | 656,000 | |||
(Being sales booked) |
Workings:- Ledger Accounts
1.) WORK-IN-PROGRESS - CUTTING
Opening bal | 143,500 | WIP -Stitching | 114,225 |
Raw material | 24,250 | ||
Direct labor | 20,600 | ||
Factory overhead | 36,375 | Closing bal. | 110,500 |
2.) WORK-IN-PROGRESS - STITCHING
Opening bal | 163,300 | Finished goods inventory | 367,225 |
WIP- Cutting | 114,225 | ||
Direct labor | 82,400 | ||
Factory overhead | 98,800 | Closing bal. | 91,500 |
3.) FINISHED GOODS INVENTORY
Opening bal | 40,100 | Cost of goods sold | 379,075 |
WIP- Stitching | 367,225 | Closing bal. | 28,250 |
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Required information Problem 03-1A Production cost flow and measurement; journal entries LO P1, P2, P3, P4...
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