Forest Components makes aircraft parts. The following transactions occurred in July. Purchased $16,880 of materials on account. Issued $16,900 in direct materials to the production department. Issued $1,310 of supplies from the materials inventory. Paid for the materials purchased in transaction (1) using cash. Returned $2,160 of the materials issued to production in (2) to the materials inventory. Direct labor employees earned $31,100, which was paid in cash. Purchased miscellaneous items for the manufacturing plant for $17,290 on account. Recognized depreciation on manufacturing plant of $36,600. Applied manufacturing overhead for the month. Forest uses normal costing. It applies overhead on the basis of direct labor costs using an annual, predetermined rate. At the beginning of the year, management estimated that direct labor costs for the year would be $434,600. Estimated overhead for the year was $430,254. The following balances appeared in the inventory accounts of Forest Components for July. Beginning Ending Materials Inventory ? $ 12,560 Work-in-Process Inventory ? 10,570 Finished Goods Inventory $ 2,690 7,020 Cost of Goods Sold ? 75,100 Required: a. Prepare journal entries to record these transactions. b. Prepare T-accounts to show the flow of costs during the period from Materials Inventory through Cost of Goods Sold. Prepare T-accounts to show the flow of costs during the period from Materials Inventory through Cost of Goods Sold. Materials Inventory Work-In-Process Inventory Beg. bal. Beg. bal. 1. 16,880 16,900 2. 5. 2,160 1,310 3. Transferred to Finished Goods End. bal. 830 End. bal. 0 Manufacturing Overhead Control Applied Manufacturing Overhead Beg. bal. Beg. bal. End. bal. 0 End. bal. 0 Accounts Payable Cash Beg. bal. Beg. bal. End. bal. 0 End. bal. 0 Accumulated Depreciation—Property, Plant, and Equipment Finished Goods Inventory Beg. bal. Beg. bal. 2,690 Goods completed Transfer to Cost of Goods Sold End. bal. 2,690 End. bal. 0 Cost of Goods Sold Beg. bal. Goods completed End. bal. 0 This is part A I think i done this part right but struggling with the T accounts No Transaction General Journal Debit Credit A 1 Materials inventory 16,880 Accounts payable 16,880 B 2 Work-in-process—direct materials 16,900 Materials inventory 16,900 C 3 Manufacturing overhead control 1,310 Materials inventory 1,310 D 4 Accounts payable Cash E 5 Materials inventory 2,160 Work-in-process—direct materials 2,160 F 6 Wages payable 31,100 Cash 31,100 Work-in-process—direct labor 31,100 Wages payable 31,100 G 7 Applied manufacturing overhead 17,920 Accounts payable 17,920 H 8 Manufacturing overhead control Accumulated depreciation—plant I 9 Work-in-process—overhead 30,790 Manufacturing overhead control 30,790 Finished goods inventory 79,430 Work-in-process—overhead
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
Forest Components makes aircraft parts. The following transactions occurred in July.
-
Purchased $16,880 of materials on account.
-
Issued $16,900 in direct materials to the production department.
-
Issued $1,310 of supplies from the materials inventory.
-
Paid for the materials purchased in transaction (1) using cash.
-
Returned $2,160 of the materials issued to production in (2) to the materials inventory.
-
Direct labor employees earned $31,100, which was paid in cash.
-
Purchased miscellaneous items for the manufacturing plant for $17,290 on account.
-
Recognized
depreciation on manufacturing plant of $36,600. -
Applied manufacturing
overhead for the month.
Forest uses normal costing. It applies overhead on the basis of direct labor costs using an annual, predetermined rate. At the beginning of the year, management estimated that direct labor costs for the year would be $434,600. Estimated overhead for the year was $430,254.
The following balances appeared in the inventory accounts of Forest Components for July.
| Beginning | Ending | ||||
| Materials Inventory | ? | $ | 12,560 | ||
| Work-in-Process Inventory | ? | 10,570 | |||
| Finished Goods Inventory | $ | 2,690 | 7,020 | ||
| Cost of Goods Sold | ? | 75,100 | |||
Required:
a. Prepare
b. Prepare T-accounts to show the flow of costs during the period from Materials Inventory through Cost of Goods Sold.
Prepare T-accounts to show the flow of costs during the period from Materials Inventory through Cost of Goods Sold.
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This is part A I think i done this part right but struggling with the T accounts
| No | Transaction | General Journal | Debit | Credit |
|---|---|---|---|---|
| A | 1 | Materials inventory | 16,880 | |
| Accounts payable | 16,880 | |||
| B | 2 | Work-in-process—direct materials | 16,900 | |
| Materials inventory | 16,900 | |||
| C | 3 | Manufacturing overhead control | 1,310 | |
| Materials inventory | 1,310 | |||
| D | 4 | Accounts payable | ||
| Cash | ||||
| E | 5 | Materials inventory | 2,160 | |
| Work-in-process—direct materials | 2,160 | |||
| F | 6 | Wages payable | 31,100 | |
| Cash | 31,100 | |||
| Work-in-process—direct labor | 31,100 | |||
| Wages payable | 31,100 | |||
| G | 7 | Applied manufacturing overhead | 17,920 | |
| Accounts payable | 17,920 | |||
| H | 8 | Manufacturing overhead control | ||
| Accumulated depreciation—plant | ||||
| I | 9 | Work-in-process—overhead | 30,790 | |
| Manufacturing overhead control | 30,790 | |||
| Finished goods inventory | 79,430 | |||
| Work-in-process—overhead | 79,430 |
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