Develop, Inc. is a manufacturer of digital cameras. It has two departments: assembly and testing. In January 2017, the company incurred $800,000 on direct materials and $810,000 on conversion costs, for a total manufacturing cost of $1,610,000. During February 20,000 cameras are placed into production, but only 15,000 cameras are fully completed at the end of the month. All direct materials have been added to the remaining 5,000 cameras. However, on average, these remaining 5,000 cameras are only 75% complete as to conversion costs. Read the requirement2. Prepare summary journal entries for the use of direct materials and incurrence of conversion costs. (Record debits first, then credits. Exclude explanations from any journal entries.) Begin by recording the purchase and use of direct materials. Journal Entry Date Accounts Debit Credit JE 1 (1) (2) (3) (4) Record the conversion costs. Journal Entry Date Accounts Debit Credit JE 2 (5) (6) (7) (8) Prepare a journal entry to transfer out the cost of goods completed. Journal Entry Date Accounts Debit Credit JE 3 (9) (10) (11) (12) Show the postings to the Work in Process account. Work in Process—Assembly Department Bal. 0 (13) (14) (15) (16) (17) (18) Bal. Bal. 1: Reference Direct Materials Conversion Costs Total Costs incurred during the period $800,000 $810,000 Equivalent units of work done in current period 20,000 18,750 Cost per equivalent unit $40.00 $43.20 $83.20 2: Requirement Prepare summary journal entries for the use of direct materials and incurrence of conversion costs. Also prepare a journal entry to transfer out the cost of goods completed. Show the postings to the Work in Process account.
Develop, Inc. is a manufacturer of digital cameras. It has two departments: assembly and testing. In January 2017, the company incurred $800,000 on direct materials and $810,000 on conversion costs, for a total manufacturing cost of $1,610,000. During February 20,000 cameras are placed into production, but only 15,000 cameras are fully completed at the end of the month. All direct materials have been added to the remaining 5,000 cameras. However, on average, these remaining 5,000 cameras are only 75% complete as to conversion costs. Read the requirement2. Prepare summary journal entries for the use of direct materials and incurrence of conversion costs. (Record debits first, then credits. Exclude explanations from any journal entries.) Begin by recording the purchase and use of direct materials. Journal Entry Date Accounts Debit Credit JE 1 (1) (2) (3) (4) Record the conversion costs. Journal Entry Date Accounts Debit Credit JE 2 (5) (6) (7) (8) Prepare a journal entry to transfer out the cost of goods completed. Journal Entry Date Accounts Debit Credit JE 3 (9) (10) (11) (12) Show the postings to the Work in Process account. Work in Process—Assembly Department Bal. 0 (13) (14) (15) (16) (17) (18) Bal. Bal. 1: Reference Direct Materials Conversion Costs Total Costs incurred during the period $800,000 $810,000 Equivalent units of work done in current period 20,000 18,750 Cost per equivalent unit $40.00 $43.20 $83.20 2: Requirement Prepare summary journal entries for the use of direct materials and incurrence of conversion costs. Also prepare a journal entry to transfer out the cost of goods completed. Show the postings to the Work in Process account.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Question
Develop, Inc. is a manufacturer of digital cameras. It has two departments: assembly and testing. In January 2017, the company incurred $800,000 on direct materials and $810,000 on conversion costs, for a total manufacturing cost of $1,610,000. During February 20,000 cameras are placed into production, but only 15,000 cameras are fully completed at the end of the month. All direct materials have been added to the remaining
5,000 cameras. However, on average, these remaining
5,000 cameras are only 75% complete as to conversion costs.
Read the requirement2.
Prepare summary journal entries for the use of direct materials and incurrence of conversion costs. (Record debits first, then credits. Exclude explanations from any journal entries.)
Begin by recording the purchase and use of direct materials.
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Date
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Accounts
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Debit
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Credit
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JE 1
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(1)
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(2)
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(3)
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(4)
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Record the conversion costs.
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Journal Entry
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Date
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Accounts
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Debit
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Credit
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JE 2
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(5)
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(6)
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(7)
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(8)
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Prepare a journal entry to transfer out the cost of goods completed.
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Journal Entry
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Date
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Accounts
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Debit
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Credit
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JE 3
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(9)
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(10)
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(11)
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(12)
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Show the postings to the Work in Process account.
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Work in Process—Assembly Department
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Bal.
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0
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(13)
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(14)
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(15)
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(16)
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(17)
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(18)
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Bal.
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Bal.
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1: Reference
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Direct Materials
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Conversion Costs
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Total
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Costs incurred during the period
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$800,000
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$810,000
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Equivalent units of work done in current period
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20,000
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18,750
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Cost per equivalent unit
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$40.00
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$43.20
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$83.20
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2: Requirement
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Prepare summary journal entries for the use of direct materials and incurrence of conversion costs. Also prepare a journal entry to transfer out the cost of goods completed. Show the postings to the Work in Process account.
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