Forest Components makes aircraft parts. The following transactions occurred in July. Purchased $119,000 of materials on account. Issued $117,600 in direct materials to the production department. Issued $8,400 of supplies from the materials inventory. Paid for the materials purchased in

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question

Forest Components makes aircraft parts. The following transactions occurred in July.

  1. Purchased $119,000 of materials on account.

  2. Issued $117,600 in direct materials to the production department.

  3. Issued $8,400 of supplies from the materials inventory.

  4. Paid for the materials purchased in transaction (1) using cash.

  5. Returned $15,400 of the materials issued to production in (2) to the materials inventory.

  6. Direct labor employees earned $217,000, which was paid in cash.

  7. Purchased miscellaneous items for the manufacturing plant for $120,400 on account.

  8. Recognized depreciation on manufacturing plant of $245,000.

  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 $3,000,000. Estimated overhead for the year was $2,790,000.

 

The following balances appeared in the inventory accounts of Forest Components for July.
 

  Beginning   Ending
Materials Inventory   ?     $88,200  
Work-in-Process Inventory   ?     73,500  
Finished Goods Inventory   $18,200     49,700  
Cost of Goods Sold   ?     521,500  
   

 
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.

Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps with 1 images

Blurred answer
Knowledge Booster
Accounting for Merchandise Inventory
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education