Raw Materials: nventory, Jan. 1 ssuance to production Purchases on account Factory Labor: Total Factory payroll Factory overhead: Plant depreciation Utilities Repair and Maintenance ndirect Materials ndirect Labor Other overhead costs P600,000 3,600,000 4,350,000 2,700,000 200,000 145,000 145,000 230,000 600,000 105,000

Raw Materials: nventory, Jan. 1 ssuance to production Purchases on account Factory Labor: Total Factory payroll Factory overhead: Plant depreciation Utilities Repair and Maintenance ndirect Materials ndirect Labor Other overhead costs P600,000 3,600,000 4,350,000 2,700,000 200,000 145,000 145,000 230,000 600,000 105,000

Name: PSMO Company currently uses normal costing method in accumulating the
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Description: PSMO Company currently uses normal costing method in accumulating the cost ofproduction. The following data were provided for the current yearRaw Materials:Inventory, Jan. 1Issuance to productionPurchases on accountFactory Labor:Total Factory payrol

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter10: Accounting Systems For Manufacturing Operations

Section: Chapter Questions

Problem 10.11E

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For E2-17, prepare any journal entries that would have been different if the only trigger points had been the purchase of materials and the sale of finished goods. Davis Co. uses backflush costing to account for its manufacturing costs. The trigger points are the purchase of materials, the completion of goods, and the sale of goods. Prepare journal entries to account for the following: a. Purchased raw materials, on account, 70,000. b. Requisitioned raw materials to production, 70,000. c. Distributed direct labor costs, 15,000. d. Factory overhead costs incurred, 45,000. (Use Various Credits for the account in the credit part of the entry.) e. Completed all of the production started. f. Sold the completed production for 195,000, on account. (Hint: Use a single account for raw materials and work in process.)
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