Bowen Company manufactures one product, It does not malntaln any beginning or ending Inventorles, and Its uses a standard cost system. Its predetermined overhead rate Includes $1,000,000 of fixed overhead In the numerator and 50,000 direct labor-hours In the denominator. The company purchased (with cash) and used 46,000 yards of raw materlals at a cost of $11.20 per yard. Its direct laborers worked 20,700 hours and were pald a total of $291,400. The company started and completed 9,500 units of finlshed goods during the perlod. Bowen's standard cost card for Its only product Is as follows: (1) Standard (2) Standard Standard Quantity or Hours 4.4 yards Price Cost Inputs or Rate $17.00 per yard $14.00 per hour $20.00 per hour (1) x (2) Direct materials $ 74.80 Direct labor 3.8 hours 5a.20 Fixed manufacturing overhead 3.8 hours 76.00 Total standard cost per unit $204.00 Required: 1. When recording the raw materlal purchases: a. The Raw Materials Inventory will Increase (decrease) by how much? b. The Cash will Increase (decrease) by how much? 2 When recording the raw materials used In production: a. The Raw Materlals Inventory will Increase (decrease) by how much? b. The Work In Process Inventory will Increase (decrease) by how much? 3. When recording the direct labor costs added to production: a. The Work In Process Inventory will Increase (decrease) by how much? b. The Cash will Increase (decrease) by how much? 4. When applying fixed manufacturing overhead to production, the Work In Process Inventory will Increase (decrease) by how much? 5. When transferring manufacturing costs from Work In Process to Finished Goods, the Finished Goods Inventory will Increase (decrease) by how much? 1a. The raw materials will by 1b. The cash will by 2a. The raw materials will by 2b The work in process will by За. The work in process will by 3b. The cash will by 4. The work in process will by The finished goods will by
The Effect Of Prepaid Taxes On Assets And Liabilities
Many businesses estimate tax liability and make payments throughout the year (often quarterly). When a company overestimates its tax liability, this results in the business paying a prepaid tax. Prepaid taxes will be reversed within one year but can result in prepaid assets and liabilities.
Final Accounts
Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded.
Ledger Posting
A ledger is an account that provides information on all the transactions that have taken place during a particular period. It is also known as General Ledger. For example, your bank account statement is a general ledger that gives information about the amount paid/debited or received/ credited from your bank account over some time.
Trial Balance and Final Accounts
In accounting we start with recording transaction with journal entries then we make separate ledger account for each type of transaction. It is very necessary to check and verify that the transaction transferred to ledgers from the journal are accurately recorded or not. Trial balance helps in this. Trial balance helps to check the accuracy of posting the ledger accounts. It helps the accountant to assist in preparing final accounts. It also helps the accountant to check whether all the debits and credits of items are recorded and posted accurately. Like in a balance sheet debit and credit side should be equal, similarly in trial balance debit balance and credit balance should tally.
Adjustment Entries
At the end of every accounting period Adjustment Entries are made in order to adjust the accounts precisely replicate the expenses and revenue of the current period. It is also known as end of period adjustment. It can also be referred as financial reporting that corrects the errors made previously in the accounting period. The basic characteristics of every adjustment entry is that it affects at least one real account and one nominal account.
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