Exercise 7-22 (Algo) Assigning Costs to Jobs (LO 7-1, 2) The following transactions occurred in April at Steve’s Cabinets, a custom cabinet firm. Purchased $18,500 of materials on account. Issued $1,050 of supplies from the materials inventory. Purchased $11,700 of materials on account. Paid for the materials purchased in transaction (1) using cash. Issued $14,100 in direct materials to the production department. Incurred direct labor costs of $22,500, which were credited to Wages Payable. Paid $21,700 cash for utilities, power, equipment maintenance, and other miscellaneous items for the manufacturing plant. Applied overhead on the basis of 120 percent of $22,500 direct labor costs. Recognized depreciation on manufacturing property, plant, and equipment of $10,500. The following balances appeared in the accounts of Steve’s Cabinets for April. Beginning Ending Materials Inventory $ 30,390 ? Work-in-Process Inventory 7,100 ? Finished Goods Inventory 33,700 $ 28,890 Cost of Goods Sold 53,430 Required: a. Prepare journal entries to record the transactions. b. Prepare T-accounts to show the flow of costs during the period from Materials Inventory through Cost of Goods Sold.
Exercise 7-22 (Algo) Assigning Costs to Jobs (LO 7-1, 2)
The following transactions occurred in April at Steve’s Cabinets, a custom cabinet firm.
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Purchased $18,500 of materials on account.
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Issued $1,050 of supplies from the materials inventory.
-
Purchased $11,700 of materials on account.
-
Paid for the materials purchased in transaction (1) using cash.
-
Issued $14,100 in direct materials to the production department.
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Incurred direct labor costs of $22,500, which were credited to Wages Payable.
-
Paid $21,700 cash for utilities, power, equipment maintenance, and other miscellaneous items for the manufacturing plant.
-
Applied
overhead on the basis of 120 percent of $22,500 direct labor costs. -
Recognized
depreciation on manufacturing property, plant, and equipment of $10,500.
The following balances appeared in the accounts of Steve’s Cabinets for April.
| Beginning | Ending | |||||
| Materials Inventory | $ | 30,390 | ? | |||
| Work-in-Process Inventory | 7,100 | ? | ||||
| Finished Goods Inventory | 33,700 | $ | 28,890 | |||
| Cost of Goods Sold | 53,430 | |||||
Required:
a. Prepare
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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