(L. OBJ. 2, 3, 4) Comprehensive accounting for manufacturing transactions [90—1 20 min]...

(L. OBJ. 2, 3, 4) Comprehensive accounting for manufacturing transactions [90—1 20 min]

Mighties’ Stars produces stars for elementary teachers to reward their students Mighties’ Stars’ trial balance on September 1 follows:

Requirements

1. Open T-accounts for the general ledger; the Materials ledger, the Work in process ledger, and the Finished goods ledger insert each account balance as given, and use the reference Bal.

2. Record the September transactions directly in the accounts, using the letters as references. Mighties’ uses a perpetual inventory system.

3. Prepare a trial balance at September 30.

4. Use the Work in process T-account to prepare a schedule of cost of goods manufactured for the month of September. (You may want to review Exhibit 15-10.)

5. Prepare an income statement for the month of September. To calculate cost of goods sold, you may want to review Exhibit 15-7. (Hint: In transaction I you closed any under/overallocated manufacturing overhead to Cost of goods sold. In the income statement, show this correction as an adjustment to Cost of goods sold. If manufacturing overhead is underallocated, the adjustment will increase Cost of goods sold. If overhead is overallocated, the adjustment will decrease Cost of goods sold.)