a) state the journal entries  necessary to record the above transaction in the general ledger. using the perpetual inventory system (a)What is the balance in the Cost of Goods Sold account after the adjustment?  (f) Open T-accounts for Materials Inventory, Work in Process Inventory and Finished Goods Inventory. Post the appropriate entries to these accounts & determine the ending account balances.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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KRAFT ‘R’ US does customized, hand-crafted memorabilia, in which each batch of items is a job. The
company has a highly labour intensive production process, so it allocates manufacturing overhead based on
direct labour hours.
Starz pre-determined overhead application rate for 20X8 was computed from the following data:
Total estimated factory overheads    2400000
Total estimated direct labour hours         40000


At the end of May 20X8, KRAFT ‘R’ US reported the following inventories:


Materials Inventory  dr 208000

WIP Inventory  DR   176000      Finished Goods Inventory DR    95000

During June 20X8, KRAFT ‘R’ US actually used 3,000 direct labour hours and recorded the following
transactions.
(i) Purchased materials on account $310,000
(ii) Manufacturing wages incurred $400,000
(iii) Materials requisitioned (includes $30,000 of indirect materials) $420,000


(iv) Assigned manufacturing wages, 85% direct labour, 15% indirect labour


(v) Depreciation expense on factory equipment used on the different jobs $95,000
(v) Other manufacturing overhead incurred $35,000
(vi) Allocated manufacturing overhead for June 20X8
(vii) Cost of jobs completed $995,000
(viii) Cost of jobs sold (on account) at a margin of 33⅓% on sales $960,000
Required:

a) state the journal entries  necessary to record the above transaction in the general ledger. using the perpetual inventory system
(a)What is the balance in the Cost of Goods Sold account after the adjustment? 

(f) Open T-accounts for Materials Inventory, Work in Process Inventory and Finished Goods Inventory. Post the appropriate entries to these accounts & determine the ending account balances. 

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