ine records of Fremont Corporation s initial and unaudited accounts snow the Tollowing enaing inventory balances, which must be adjusted to actual costs. Work-in-process inventory Finished goods inventory Units 120,000 20,000 Unaudited Costs $793,152 337,560 As the auditor, you have learned the following information. Ending work-in-process inventory is 40 percent complete with respect to conversion costs. Materials are added at the beginning of the manufacturing process, and overhead is applied at the rate of 80 percent of the direct labor costs. There was no finished goods inventory at the start of the period. The following additional information is also available. Costs Beginning inventory (80% complete as to labor) Units 80,000 Direct Materials Direct Labor $ 240,000 $ 546,000 Units started 400,000 Current costs 1,560,000 2,208,000 Units completed and transferred to finished goods inventory 360,000 Required: a. Prepare a production cost report for Fremont using the weighted-average method. (Hint: You will need to calculate equivalent units. for three categories: materials, labor, and overhead.) b. Show the journal entry required to correct the difference between the unaudited records and actual ending balances of Work-in- Process Inventory and Finished Goods Inventory. Debit or credit Cost of Goods Sold for any difference.
ine records of Fremont Corporation s initial and unaudited accounts snow the Tollowing enaing inventory balances, which must be adjusted to actual costs. Work-in-process inventory Finished goods inventory Units 120,000 20,000 Unaudited Costs $793,152 337,560 As the auditor, you have learned the following information. Ending work-in-process inventory is 40 percent complete with respect to conversion costs. Materials are added at the beginning of the manufacturing process, and overhead is applied at the rate of 80 percent of the direct labor costs. There was no finished goods inventory at the start of the period. The following additional information is also available. Costs Beginning inventory (80% complete as to labor) Units 80,000 Direct Materials Direct Labor $ 240,000 $ 546,000 Units started 400,000 Current costs 1,560,000 2,208,000 Units completed and transferred to finished goods inventory 360,000 Required: a. Prepare a production cost report for Fremont using the weighted-average method. (Hint: You will need to calculate equivalent units. for three categories: materials, labor, and overhead.) b. Show the journal entry required to correct the difference between the unaudited records and actual ending balances of Work-in- Process Inventory and Finished Goods Inventory. Debit or credit Cost of Goods Sold for any difference.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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help please answer this with compulsory explanation , computation , narration for each parts and steps clearly in detail answer in text form no copy paste
Transcribed Image Text:ine records of Fremont Corporation s initial and unaudited accounts snow the Tollowing enaing inventory balances, which must be
adjusted to actual costs.
Work-in-process inventory
Finished goods inventory
Units
120,000
20,000
Unaudited Costs
$793,152
337,560
As the auditor, you have learned the following information. Ending work-in-process inventory is 40 percent complete with respect to
conversion costs. Materials are added at the beginning of the manufacturing process, and overhead is applied at the rate of 80
percent of the direct labor costs. There was no finished goods inventory at the start of the period. The following additional information
is also available.
Costs
Beginning inventory (80% complete as to labor)
Units
80,000
Direct Materials
Direct Labor
$ 240,000
$ 546,000
Units started
400,000
Current costs
1,560,000
2,208,000
Units completed and transferred to finished goods inventory
360,000
Required:
a. Prepare a production cost report for Fremont using the weighted-average method. (Hint: You will need to calculate equivalent units.
for three categories: materials, labor, and overhead.)
b. Show the journal entry required to correct the difference between the unaudited records and actual ending balances of Work-in-
Process Inventory and Finished Goods Inventory. Debit or credit Cost of Goods Sold for any difference.
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