Major League Bat Company manufactures baseball bats. In addition to its work in process inventories, the company maintains inventories of raw materials and finished goods. It uses raw materials as direct materials in production and as indirect materials. Its factory payroll costs include direct labor for production and indirect labor. All materials are added at the beginning of the process, and conversion costs are applied uniformly throughout the production process. Required: You are to maintain records and produce measures of inventories to reflect the July events of this company. The June 30 balances: Raw Materials Inventory, $25,000; Work in Process Inventory, $8,135 ($2,660 of direct materials and $5,475 of conversion); Finished Goods Inventory, $110,000; Sales, $0; Cost of Goods Sold, $0; Factory Wages Payable, $0; and Factory Overhead, $0. Prepare journal entries to record the following July transactions and events. Purchased raw materials for $125,000 cash. Used raw materials as follows: direct materials, $52,440, and indirect materials, $10,000. Recorded factory wages payable costs as follows: direct labor, $202,250, and indirect labor, $25,000. Incurred other actual factory overhead costs of $66,125 paid in cash. Applied factory overhead to production at 50% of direct labor costs. Information about the July work in process (WIP) inventory follows. Use this information with that from part 1 to prepare a production cost report, assuming the weighted average method is used. Units Beginning WIP inventory 5,000 units Started 14,000 units Units transferred out 11,000 units Ending WIP inventory 8,000 units Beginning WIP inventory Direct materials—Percent complete 100% Conversion—Percent complete 75% Ending WIP inventory Direct materials—Percent complete 100% Conversion—Percent complete 40% Using the results from part 2 and the available information, make computations and prepare journal entries to record the following: Total costs transferred to finished goods for July. Sale of finished goods costing $265,700 for $625,000 in cash. Post entries from parts 1 and 3 to the following general ledger accounts.

Major League Bat Company manufactures baseball bats. In addition to its work in process inventories, the company maintains inventories of raw materials and finished goods. It uses raw materials as direct materials in production and as indirect materials. Its factory payroll costs include direct labor for production and indirect labor. All materials are added at the beginning of the process, and conversion costs are applied uniformly throughout the production process. Required: You are to maintain records and produce measures of inventories to reflect the July events of this company. The June 30 balances: Raw Materials Inventory, $25,000; Work in Process Inventory, $8,135 ($2,660 of direct materials and $5,475 of conversion); Finished Goods Inventory, $110,000; Sales, $0; Cost of Goods Sold, $0; Factory Wages Payable, $0; and Factory Overhead, $0. Prepare journal entries to record the following July transactions and events. Purchased raw materials for $125,000 cash. Used raw materials as follows: direct materials, $52,440, and indirect materials, $10,000. Recorded factory wages payable costs as follows: direct labor, $202,250, and indirect labor, $25,000. Incurred other actual factory overhead costs of $66,125 paid in cash. Applied factory overhead to production at 50% of direct labor costs. Information about the July work in process (WIP) inventory follows. Use this information with that from part 1 to prepare a production cost report, assuming the weighted average method is used. Units Beginning WIP inventory 5,000 units Started 14,000 units Units transferred out 11,000 units Ending WIP inventory 8,000 units Beginning WIP inventory Direct materials—Percent complete 100% Conversion—Percent complete 75% Ending WIP inventory Direct materials—Percent complete 100% Conversion—Percent complete 40% Using the results from part 2 and the available information, make computations and prepare journal entries to record the following: Total costs transferred to finished goods for July. Sale of finished goods costing $265,700 for $625,000 in cash. Post entries from parts 1 and 3 to the following general ledger accounts.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Required:

You are to maintain records and produce measures of inventories to reflect the July events of this company. The June 30 balances: Raw Materials Inventory, $25,000; Work in Process Inventory, $8,135 ($2,660 of direct materials and $5,475 of conversion); Finished Goods Inventory, $110,000; Sales, $0; Cost of Goods Sold, $0; Factory Wages Payable, $0; and Factory Overhead, $0.

Prepare journal entries to record the following July transactions and events.
1. Purchased raw materials for $125,000 cash.
2. Used raw materials as follows: direct materials, $52,440, and indirect materials, $10,000.
3. Recorded factory wages payable costs as follows: direct labor, $202,250, and indirect labor, $25,000.
4. Incurred other actual factory overhead costs of $66,125 paid in cash.
5. Applied factory overhead to production at 50% of direct labor costs.
Information about the July work in process (WIP) inventory follows. Use this information with that from part 1 to prepare a production cost report, assuming the weighted average method is used.

Units

Beginning WIP inventory 5,000 units

Started 14,000 units

Units transferred out 11,000 units

Ending WIP inventory 8,000 units

Beginning WIP inventory

Direct materials—Percent complete 100%

Conversion—Percent complete 75%

Ending WIP inventory

Direct materials—Percent complete 100%

Conversion—Percent complete 40%
Using the results from part 2 and the available information, make computations and prepare journal entries to record the following:
1. Total costs transferred to finished goods for July.
2. Sale of finished goods costing $265,700 for $625,000 in cash.
3. Post entries from parts 1 and 3 to the following general ledger accounts.

Units
Beginning WIP inventory	5,000	units
Started	14,000	units
Units transferred out	11,000	units
Ending WIP inventory	8,000	units

Beginning WIP inventory
Direct materials—Percent complete	100%
Conversion—Percent complete	75%

Ending WIP inventory
Direct materials—Percent complete	100%
Conversion—Percent complete	40%

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