Forest Components makes aircraft parts. The following transactions occurred in July. 1. Purchased $16,990 of materials on account. 2. Issued $16,710 in direct materials to the production department. 3. Issued $1,230 of supplies from the materials inventory. 4. Paid for the materials purchased in transaction (1) using cash. 5. Returned $2,190 of the materials issued to production in (2) to the materials inventory. 6. Direct labor employees earned $31,200, which was paid in cash. 7. Purchased miscellaneous items for the manufacturing plant for $17,390 on account. 8. Recognized depreciation on manufacturing plant of $35,800. 9. Applied manufacturing overhead for the month. Forest uses normal costing. It applies overhead on the basis of direct labor costs using an annual, predetermined rate. At the beginning of the year, management estimated that direct labor costs for the year would be $435,900. Estimated overhead for the year was $418,464. The following balances appeared in the inventory accounts of Forest Components for July. Beginning Ending $12,440 Materials Inventory Work-in-Process Inventory Finished Goods Inventory Cost of Goods Sold 10,530 6,910 73,600 $2,640 Required: a. Prepare journal entries to record these transactions.
Forest Components makes aircraft parts. The following transactions occurred in July. 1. Purchased $16,990 of materials on account. 2. Issued $16,710 in direct materials to the production department. 3. Issued $1,230 of supplies from the materials inventory. 4. Paid for the materials purchased in transaction (1) using cash. 5. Returned $2,190 of the materials issued to production in (2) to the materials inventory. 6. Direct labor employees earned $31,200, which was paid in cash. 7. Purchased miscellaneous items for the manufacturing plant for $17,390 on account. 8. Recognized depreciation on manufacturing plant of $35,800. 9. Applied manufacturing overhead for the month. Forest uses normal costing. It applies overhead on the basis of direct labor costs using an annual, predetermined rate. At the beginning of the year, management estimated that direct labor costs for the year would be $435,900. Estimated overhead for the year was $418,464. The following balances appeared in the inventory accounts of Forest Components for July. Beginning Ending $12,440 Materials Inventory Work-in-Process Inventory Finished Goods Inventory Cost of Goods Sold 10,530 6,910 73,600 $2,640 Required: a. Prepare journal entries to record these transactions.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Forest Components makes aircraft parts. The following transactions occurred in July.
1. Purchased $16,990 of materials on account.
2. Issued $16,710 in direct materials to the production department.
3. Issued $1,230 of supplies from the materials inventory.
4. Paid for the materials purchased in transaction (1) using cash.
5. Returned $2,190 of the materials issued to production in (2) to the materials inventory.
6. Direct labor employees earned $31,200, which was paid in cash.
7. Purchased miscellaneous items for the manufacturing plant for $17,390 on account.
8. Recognized depreciation on manufacturing plant of $35,800.
9. Applied manufacturing overhead for the month.
Forest uses normal costing. It applies overhead on the basis of direct labor costs using an annual, predetermined rate. At the
beginning of the year, management estimated that direct labor costs for the year would be $435,900. Estimated overhead for the year
was $418,464.
The following balances appeared in the inventory accounts of Forest Components for July.
Beginning Ending
$12,440
Materials Inventory
Work-in-Process Inventory
Finished Goods Inventory
?
10,530
6,910
73,600
$2,640
Cost of Goods Sold
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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