MIGHTY STARS Trial Balance June 1, 2018 Balance Account Title Debit Credit Cash $ 14,000 Accounts Receivable 150,000 Inventories: Raw Materials 6,000 Work-in-Process 40,000 Finished Goods 20,400 Property, Plant, and Equipment 220,000 Accumulated Depreciation $ 75,000 Accounts Payable 134,000 Wages Payable 2,600 Common Stock 139,000 Retained Earnings 109,800 Sales Revenue Cost of Goods Sold Manufacturing Overhead Selling and Administrative Expenses Totals $ 460,400 $ 460,400 Job 120: Paper, $950 Job 121: Paper, $7,900 Indirect materials $1,200
Preparing comprehensive accounting for manufacturing transactions
Mighty Stars produces stars for elementary teachers to reward their students Mighty Stars’
June 1 balances in the subsidiary ledgers were as follows:
• Raw Materials Inventory subsidiary ledger: Paper, $4,000; indirect materials, $2,000
• Work-in-Process Inventory subsidiary ledger: Job 120, $40,000; Job 121, $0
June transactions are summarized as follows:
a. Collections on account, $145,000.
b. Selling and administrative expenses incurred and paid, $32,000.
c. Payments on account, $39,000.
d. Materials purchases on account: Paper, $24,000; indirect materials, $4,200.
e. Materials requisitioned and used in production:
f. Wages incurred during June, $39,000. Labor time records for the month: Job 120, $3,600; Job 121, $17,000; indirect labor, $18,400.
g. Wages paid in June include the balance in Wages Payable at May 31 plus $36,100 of wages incurred during June.
h.
i. Manufacturing overhead allocated at the predetermined overhead allocation rate of 8% of direct labor costs.
j. jobs completed during the month: job 120 with 700,000 Large Stars at a total cost of $47,430.
k. Sales on account: all of Job 120 for $104,000.
l. Adjusted for overallocated or underallocated manufacturing overhead.
Requirements
- Journalize the transactions for the company.
- Open T-accounts for the general ledger, the Raw Materials Inventory subsidiary ledger, the Work-in-Process Inventory subsidiary ledger, and the Finished Goods Inventory subsidiary ledger. Insert each account balance as given, and use the reference Bal.
Post the journal entries to the T-accounts using the transaction letters as a reference. - Prepare a trial balance at June 30, 2018.
- Use the Work-in-Process Inventory T-account to prepare a schedule of cost of goods manufactured for the month of June.
- Prepare an income statement for the month of June.
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