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Entries for process cost system Preston & Grover Soap Company manufactures powdered detergent. Phosphate is placed in process in the Making Department, where it is turned into granulars. The output of Making is transferred to the Packing Department, where packaging is added at the beginning of the process. On July 1, Preston & Grover Soap Company had the following inventories: Finished Goods $13,500 Work in Process—Making 6,790 Work in Process—Packing 7,350 Materials 5,100 Departmental accounts are maintained for factory overhead, which both have zero balances on July 1. Manufacturing operations for July are summarized as follows: a Materials purchased on account $149,800 b Materials requisitioned for use Phosphate—Making Department $105,700 Packaging—Packing Department 31,300 Indirect materials—Making Department 4,930 Indirect materials—Packing Department 1,530 c. Labor used Direct labor—Making Department $32,400 Direct labor—Packing Department 40,900 Indirect labor—Making Department 15,400 Indirect labor—Packing Department 18,300 d Depreciation charged on fixed assets: Making Department $10,700 Packing Department 7,900 e. Expired prepaid factory insurance: Making Department $2,000 Packing Department 1,500 f. Applied factory overhead Making Department $32,570 Packing Department 30,050 g Production costs transferred from Making Department to Packing Department $166,790 h Production costs transferred from Packing Department to Finished Goods $263,400 i. Cost of goods sold during the period $265,200 Instructions 1. Journalize the entries to record the operations, identifying each entry by letter. 2. Compute the January 31 balances of the inventory accounts. 3. Compute the January 31 balances of the factory overhead accounts.

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Accounting

27th Edition
WARREN + 5 others
Publisher: Cengage Learning,
ISBN: 9781337272094
BuyFind

Accounting

27th Edition
WARREN + 5 others
Publisher: Cengage Learning,
ISBN: 9781337272094

Solutions

Chapter
Section
Chapter 20, Problem 20.1BPR
Textbook Problem

Entries for process cost system

Preston & Grover Soap Company manufactures powdered detergent. Phosphate is placed in process in the Making Department, where it is turned into granulars. The output of Making is transferred to the Packing Department, where packaging is added at the beginning of the process. On July 1, Preston & Grover Soap Company had the following inventories:

Finished Goods $13,500
Work in Process—Making 6,790
Work in Process—Packing 7,350
Materials 5,100

Departmental accounts are maintained for factory overhead, which both have zero balances on July 1.

Manufacturing operations for July are summarized as follows:

a Materials purchased on account $149,800
b Materials requisitioned for use  
Phosphate—Making Department $105,700
Packaging—Packing Department 31,300
Indirect materials—Making Department 4,930
Indirect materials—Packing Department 1,530
c. Labor used  
Direct labor—Making Department $32,400
Direct labor—Packing Department 40,900
Indirect labor—Making Department 15,400
Indirect labor—Packing Department 18,300
d Depreciation charged on fixed assets:  
Making Department $10,700
Packing Department 7,900
e. Expired prepaid factory insurance:  
Making Department $2,000
Packing Department 1,500
f. Applied factory overhead  
Making Department $32,570
Packing Department 30,050
g Production costs transferred from Making Department to Packing Department $166,790
h Production costs transferred from Packing Department to Finished Goods $263,400
i. Cost of goods sold during the period $265,200

Instructions

1. Journalize the entries to record the operations, identifying each entry by letter.

2. Compute the January 31 balances of the inventory accounts.

3. Compute the January 31 balances of the factory overhead accounts.

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