Question

JHJ Publishing prints one book utilizing two processes, printing and binding The following transactions occurred 1. Purchased raw materials- ink for $900,000 2 Purchased raw materials- paper for $400,000 3. Purchased raw materials - book covers for $50,000 purchasing 50,000 covers at a unit cost of $1 each 4. Transferred $696,000 in ink to WIP-Printing 5. Transferred $360,000 in paper to WIP- Printing 6. Transferred to WIP-Binding 40,000 book covers 7. Direct labor WIP- Printing- $75,000 8. Applied factory overhead WIP- Printing was $20,000 Record the journal entry to transfer completed printed books to work-in- process binding given the following information: 9. Direct Materials Conversion Costs Completed Units Partially Completed Percentage Completed 40,000 10,000 80% 40,000 10,000 75% PROCESS COST ACCOUNTING EQUIVALENT UNITS (EU) CALCULATION CONVERSION DIRECT MATERIALS |COSTS I. UNITS COMPLETED 2-1 PARTIALLY COMPLETED 3· PERCENTAGE COMPLETED 4. PARTIALLY COMPLETED EQUIVALENT 04000 10 D UNITS TOTAL EQUIVALENT UNITS (1 +4) 6. TOTAL COST W.I.P ACCOUNT 7. COST PER EQUIVALENT UNIT (6/5) 8. UNITS TRANSFERRED ?COSTS RANSFERRED (7.8) TOTAL COST TRANSFERRED

Answer 1

As per policy, only one question is allowed to answer at a time, so answering question 1 :

1)

Process cost Equivalent units calculation
		Direct Materials	Conversion costs	Total
1	Units completed	40000	40000
2	Partially completed	10000	10000
3	Percentage completed	80%	75%
4	Partially completed equivalent units(2*3)	8000	7500
5	Total equivalent units (1+4)	48000	47500
6	Total Cost WIP Account	1056000	95000
7	Cost per Equivalent unit (6/5)	22	2
8	Units Transferred	40000	40000
9	Costs Transferred (7*8)	880000	80000
10	Total Cost Transferred			960000
Journal Entry:		Debit	Credit
Debit	WIP - binding	$960,000
Credit	WIP - paper		$960,000