Prepare T-accounts to show the flow of costs during the period from Materials Inventory through Cost of Goods Sold. Materials Inventory Debit Beginning balance Ending balance Credit Work-in-Process Inventory Debit Credit Beginning balance Ending balance Transferred to Finished Goods Manufacturing Overhead Control Applied Manufacturing Overhead Debit Credit Debit Credit Beginning balance Beginning balance Ending balance Ending balance Accounts Payable Cash Debit Credit Debit Credit Beginning balance Beginning balance Ending balance Accumulated Depreciation-Property, Plant, and Equipment Debit Beginning balance Ending balance Credit Finished Goods Inventory Debit Credit Beginning balance Goods Completed Ending balance Ending balance Wages Payable Debit Credit Beginning balance Ending balance Cost of Goods Sold Debit Credit Beginning balance Transfer to Cost of Goods Sold Goods Sold Ending balance < Required A Required B >
Elmira Tool and Die makes machine tools to order. The following transactions occurred in October:
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Issued $4,300 of supplies from the materials inventory.
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Purchased $49,500 of materials.
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Issued $45,100 in direct materials to the production department.
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Paid $45,300 for miscellaneous items for the manufacturing plant. Accounts Payable was credited.
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Returned $8,400 of the materials issued to production in (3) to the materials inventory.
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Direct labor employees earned $79,500, 50% of which was paid in cash and the remainder credited to Wages Payable.
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Purchased $19,500 of materials on account.
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Recognized depreciation on manufacturing plant of $93,500.
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Paid for the materials purchased in transaction (2).
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Applied manufacturing
overhead for the month.
Elmira uses normal costing. It applies overhead on the basis of materials costs using an annual, predetermined rate. At the beginning of the year, management estimated that materials costs for the year would be $530,000. Estimated overhead for the year was $2,173,000.
The following balances appeared in the inventory accounts of Elmira Tool and Die for October:
| Beginning | Ending | |
|---|---|---|
| Materials Inventory | ? | $ 37,500 |
| Work-in-Process Inventory | ? | 32,600 |
| Finished Goods Inventory | $ 10,200 | 106,800 |
| Cost of Goods Sold | ? | 190,300 |
Required:
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Prepare journal entries to record these transactions.
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Prepare T-accounts to show the flow of costs during the period from Materials Inventory through Cost of Goods Sold.
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