Accounting Elmira Tool and Die makes machine tools to order. The following transactions occurred in October: 1.Issued $2,800 of supplies from the materials inventory. 2.Purchased $42,000 of materials. 3.Issued $37,600 in direct materials to the production department. 4.Paid $43,800 for miscellaneous items for the manufacturing plant. Accounts Payable was credited. 5.Returned $5,400 of the materials issued to production in (3) to the materials inventory. 6.Direct labor employees earned $72,000, 50% of which was paid in cash and the remainder credited to Wages Payable. 7.Purchased $12,000 of materials on account. 8.Recognized depreciation on manufacturing plant of $86,000. 9.Paid for the materials purchased in transaction (2). 10.Applied manufacturing overhead for the month. Elmira uses normal costing. It applies overhead on the basis of material costs using an annual, predetermined rate. At the beginning of the year, management estimated that materials costs for the year would be $500,000. Estimated overhead for the year was $2,050,000. The following balances appeared in the inventory accounts of Elmira Tool and Die for October: Beginning Materials Inventory Work-in-Process Inventory Finished Goods Inventory Cost of Goods Sold ? ? $ 7,200 ? Ending $ 27,000 23,600 96,300 175,300 Required: A. Prepare journal entries to record these transactions. B. Prepare T-accounts to show the flow of costs during the period from Materials Inventory through Cost of Goods Sold.
Accounting Elmira Tool and Die makes machine tools to order. The following transactions occurred in October: 1.Issued $2,800 of supplies from the materials inventory. 2.Purchased $42,000 of materials. 3.Issued $37,600 in direct materials to the production department. 4.Paid $43,800 for miscellaneous items for the manufacturing plant. Accounts Payable was credited. 5.Returned $5,400 of the materials issued to production in (3) to the materials inventory. 6.Direct labor employees earned $72,000, 50% of which was paid in cash and the remainder credited to Wages Payable. 7.Purchased $12,000 of materials on account. 8.Recognized depreciation on manufacturing plant of $86,000. 9.Paid for the materials purchased in transaction (2). 10.Applied manufacturing overhead for the month. Elmira uses normal costing. It applies overhead on the basis of material costs using an annual, predetermined rate. At the beginning of the year, management estimated that materials costs for the year would be $500,000. Estimated overhead for the year was $2,050,000. The following balances appeared in the inventory accounts of Elmira Tool and Die for October: Beginning Materials Inventory Work-in-Process Inventory Finished Goods Inventory Cost of Goods Sold ? ? $ 7,200 ? Ending $ 27,000 23,600 96,300 175,300 Required: A. Prepare journal entries to record these transactions. B. Prepare T-accounts to show the flow of costs during the period from Materials Inventory through Cost of Goods Sold.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Accounting
Elmira Tool and Die makes machine tools to order. The following transactions
occurred in October:
1.Issued $2,800 of supplies from the materials inventory.
2.Purchased $42,000 of materials.
3.Issued $37,600 in direct materials to the production department.
4.Paid $43,800 for miscellaneous items for the manufacturing plant. Accounts
Payable was credited.
5.Returned $5,400 of the materials issued to production in (3) to the materials
inventory.
6.Direct labor employees earned $72,000, 50% of which was paid in cash and
the remainder credited to Wages Payable.
7.Purchased $12,000 of materials on account.
8.Recognized depreciation on manufacturing plant of $86,000.
9.Paid for the materials purchased in transaction (2).
10.Applied manufacturing overhead for the month.
Elmira uses normal costing. It applies overhead on the basis of material costs
using an annual, predetermined rate. At the beginning of the year,
management estimated that materials costs for the year would be $500,000.
Estimated overhead for the year was $2,050,000.
The following balances appeared in the inventory accounts of Elmira Tool and
Die for October:
Beginning
Materials Inventory
Work-in-Process Inventory
Finished Goods Inventory
Cost of Goods Sold
?
?
$ 7,200
?
Ending
$ 27,000
23,600
96,300
175,300
Required:
A. Prepare journal entries to record these transactions.
B. Prepare T-accounts to show the flow of costs during the period from
Materials Inventory through Cost of Goods Sold.
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