Question

1.

Cost of Materials Issuances Under the FIFO Method

An incomplete subsidiary ledger of materials inventory for May is as follows:

a. Complete the materials issuances and balances for the materials subsidiary ledger under FIFO.

Received				Issued				Balance
Receiving Report Number	Quantity	Unit Price		Materials Requisition Number	Quantity	Amount		Date	Quantity	Unit price	Amount
								May 1	390	$6	$2,340
24	270	$8						May 4
				107	440	$		May 10
30	180	10						May 21
				120	260			May 27

b. Determine the materials inventory balance at the end of May.

c. Journalize the summary entry to transfer materials to work in process. If an amount box does not require an entry, leave it blank.

Answer 1

Solution a:

Received			Issued			Balance
Receiving Report No.	Quantity	Unit Price	Materials Requisition No	Quantity	Amount	Date	Quantity	Unit Price	Amount
						1-May	390	$6.00	$2,340.00
24	270	$8.00				4-May	390	$6.00	$2,340.00
							270	$8.00	$2,160.00
			107	440	$2,740.00	10-May	220	$8.00	$1,760.00
30	180	$10.00				21-May	220	$8.00	$1,760.00
							180	$10.00	$1,800.00
			120	260	$2,160.00	27-May	140	$10.00	$1,400.00

Solution b:

materials inventory balance at the end of May = $1,400

Solution c:

Journal Entries
Event	Particulars	Debit	Credit
1	Work In Process Dr	$4,900.00
	To Raw materials inventory		$4,900.00
	(To record material used)