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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

Process cost journal entries

The cost of materials transferred into the Rolling Department of Keystone Steel Company is $510,000 from the Casting Department. The conversion cost for the period in the Rolling Department is $81,200 ($54,700 factory overhead applied and $26,500 direct labor). The total cost transferred to Finished Goods for the period was $553,200. The Rolling Department had a beginning inventory of $25,000.

a. Journalize (1) the cost of transferred-in materials, (2) conversion costs, and (3) the costs transferred out to Finished Goods.

b. Determine the balance of Work in Process—Rolling at the end of the period.

(a.1)

To determine

Process costs

It is a method of cost accounting, which is used where the production is continuous, and the product needs various processes to complete. This method is used to ascertain the cost of the product at each process or stage of production.

To Prepare: the journal entry to record the cost of transferred in materials from casting department to rolling department of Company KS.

Explanation

Prepare the journal entry to record the cost of transferred in materials from casting department to rolling department of Company KS as shown below:

Date Account title and Explanation Debit Credit
Work In process - Rolling department $510,000
 Work In process - Casting department �...

(a.2)

To determine

To Prepare: the journal entry to record the cost of transferred in the conversion costs from casting department to rolling department of Company KS.

(a.3)

To determine

To Prepare: The journal entry to record cost transferred out to finished goods of Company KS.

(b)

To determine
The balance of ending work in process – Rolling department of Company KS.

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