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Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094

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BuyFindarrow_forward

Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094
Textbook Problem

Entries for materials

GenX Furnishings manufactures designer furniture. GenX Furnishings uses a job order cost system. Balances on June 1 from the materials ledger are as follows:

Fabric $40,500
Polyester filling 28,600
Lumber 62,400
Glue 6,550

The materials purchased during June are summarized from the receiving reports as follows:

Fabric $ 440,000
Polyester filling 130,000
Lumber 360,000
Glue 40,000

Materials were requisitioned to individual jobs as follows:

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The glue is not a significant cost, so it is treated as indirect materials (factory overhead).

a. Journalize the entry to record the purchase of materials in June.

b. Journalize the entry to record the requisition of materials in June.

c. Determine the June 30 balances that would be shown in the materials ledger accounts.

(a)

To determine

Issuance of materials

The material storeroom releases raw materials for used in manufacturing process when a material requisition is received. The summary of material requisition aids as a basis for recording materials used in the process.

To record: Journal entry for purchase of materials.

Explanation

The journal entry is prepared as follows:

Date Account titles and Explanation Debit
($)
Credit
($)
June Materials (1) 168,000  
      Accounts Payable   168,000
  (Materials purchased during May)    

Table (1)

Working notes:

The material purchased during the month is calculated as follows:

Materials purchased = Purchases of material of�

(b)

To determine

To record: Journal entry for requisition and issuance of materials.

(c)

To determine
the ending balance of material ledger account as on June 30.

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