Basic cost system; journal entries; financial statements Similar to Self-Study Problem 1...

Basic cost system; journal entries; financial statements Similar to Self-Study Problem 1

The post-closing trial balance of Hokie Manufacturing Co. on April 30 is reproduced as follows:

During May, the following transactions took place:

a. Purchased raw materials at a cost of $45,000 and general factory supplies at a cost of $13,000 on account (recorded materials and supplies in the materials account).

b. b. Issued raw materials to be used in production, costing

c. $47,000, and miscellaneous factory supplies costing $15,000.

d. c. Recorded the payroll, the payments to employees, and the

e. distribution of the wages and salaries earned for the month

f. as follows: factory wages (including $12,000 indirect labor),

g. $41,000; and selling and administrative salaries, $7,000.

h. Additional account titles include Wages Payable and Payroll.

i. (Ignore payroll withholdings and deductions.)

j. d. Recognized depreciation for the month at an annual rate of

k. 5% on the building, 10% on the factory equipment, and 20%

l. on the office equipment. The sales and administrative staff

m. uses approximately one-fifth of the building for its offices.

n. e. Incurred other expenses totaling $11,000. One-fourth of this

o. amount is allocable to the office function.

p. f. Transferred total factory overhead costs to Work in Process.

q. g. Completed and transferred goods with a total cost of

r. $91,000 to the finished goods storeroom.

s. h. Sold goods costing $188,000 for $362,000. (Assume that all

t. sales were made on account.)

u. i. Collected accounts receivable in the amount of $345,000.

v. j. Paid accounts payable totaling $158,000.

Required:

1. Prepare journal entries to record the transactions.

2. Set up T-accounts. Post the beginning trial balance and the journal entries prepared in (1) to the accounts and determine the balances in the accounts on May 31.

3. Prepare a statement of cost of goods manufactured, an income statement, and a balance sheet. (Round amounts to the nearest whole dollar.)

Reference:

Basic Cost System; Journal Entries; Financial Statements

Chula Vista Manufacturing Co.

The post-closing trial balance of Chula Vista Manufacturing Co. at September 30 is reproduced as follows:

During October, the following transactions took place:

a. Raw materials at a cost of $50,000 and general factory supplies costing $8,000 were purchased on account. (Materials and supplies are recorded in the materials account.)

b. Raw materials to be used in production costing $41,000 and miscellaneous factory supplies costing $5,500 were issued.

c. Wages and salaries incurred and paid for the month were as follows: factory wages (including $2,500 indirect labor), $34,000, and selling and administrative salaries, $5,000. (Ignore payroll withholdings and deductions.)

d. Distributed the payroll in (c).

e. Depreciation was recorded for the month at an annual rate of 5% on the building and 20% on the factory equipment and office equipment. The sales and administrative staff uses approximately one-fifth of the building for its offices.

f. During the month, various other expenses totaling $5,200 were incurred on account. The company has determined that one-fourth of this amount is allocable to the office function.

g. Total factory overhead costs were transferred to Work in Process.

h. During the month, goods with a total cost of $79,000 were completed and transferred to the finished goods storeroom.

i. Sales for the month totaled $128,000 for goods costing $87,000 to manufacture. (Assume that all sales were made on account.)

j. Accounts receivable in the amount of $105,000 were collected.

k. Accounts payable totaling $55,000 were paid.

Required:

1. Prepare journal entries to record the transactions.

2. Set up T-accounts for all accounts listed in the September 30, 2013, Post-Closing Trial Balance and for Cost of Goods Sold, Factory Overhead, Selling and Administrative Expenses, Sales, and Wages Payable. Post the beginning trial balance and the journal entries prepared in

Part 1 to the accounts and calculate the balances in the accounts on

October 31.

3. Prepare a statement of cost of goods manufactured, an income statement,

and a balance sheet.