The following journal entries are recorded in Kiera Co.’s process cost accounting system. Kiera produces handbags and scarves. Overhead is applied to production based on direct labor cost for the period. Prepare a brief explanation (including any overhead rates applied) for each journal entry a through j.
a. | Raw Materials Inventory | 54,000 |
|
| Accounts Payable |
| 54,000 |
b. | Goods in Process Inventory | 44,000 |
|
| Raw Materials Inventory |
| 44,000 |
c. | Factory Payroll | 36,000 |
|
| Cash |
| 36,000 |
d. | Goods in Process Inventory | 28,000 |
|
| Factory Payroll |
| 28,000 |
e. | Factory Overhead | 10,500 |
|
| Cash |
| 10,500 |
f. | Factory Overhead | 3,000 |
|
| Raw Materials Inventory |
| 3,000 |
g. | Factory Overhead | 8,000 |
|
| Factory Payroll |
| 8,000 |
h. | Goods in Process Inventory | 35,000 |
|
| Factory Overhead |
| 35,000 |
i. | Finished Goods Inventory | 98,000 |
|
| Goods in Process Inventory |
| 98,000 |
j. | Accounts Receivable | 256,000 |
|
| Sales |
| 256,000 |
| Cost of Goods Sold | 104,000 |
|
| Finished Goods Inventory |
| 104,000 |
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