1. Prepare journal entries dated June 30 to record: (a) raw materials purchases, (b) direct materials usage, (c) indirect materials usage, (d) direct labor usage, (e) indirect labor usage, (f) other overhead costs, (g) overhead applied, and (h) payment of total wages costs. ### Required Information**[The following information applies to the questions displayed below.]**Pro-Weave manufactures stadium blankets by passing the products through a weaving department and a sewing department. The following information is available regarding its June inventories:| Inventory Type | Beginning Inventory | Ending Inventory ||-------------------------------------------|----------------------|--------------------|| Raw materials inventory | $144,000 | $201,000 || Work in process inventory—Weaving | $470,000 | $525,000 || Work in process inventory—Sewing | $640,000 | $890,000 || Finished goods inventory | $1,486,000 | $1,356,000 |The following additional information describes the company's manufacturing activities for June:- **Raw materials purchases (on credit):** $535,000- **Factory wages cost (paid in cash):** $3,335,000- **Other factory overhead cost (Other Accounts credited):** $204,000**Materials Used:**- Direct—Weaving: $250,000- Direct—Sewing: $78,000- Indirect: $184,000**Labor Used:**- Direct—Weaving: $1,325,000- Direct—Sewing: $485,000- Indirect: $1,525,000**Overhead rates as a percent of direct labor:**- Weaving: 80%- Sewing: 160%**Sales (on credit):** $4,350,000---**Instructions:**1. Prepare journal entries dated June 30 to record: - (a) Raw materials purchases, - (b) Direct materials usage, - (c) Indirect materials usage, - (d) Direct labor usage, - (e) Indirect labor usage, - (f) Other overhead costs, - (g) Overhead applied, - (h) Payment of total wages costs.

Solution: Journal Entries - Pro-Weave Manufacturer Event Particulars Debit Credit a Raw materials inventory Dr 535000 To Accounts payable 535000 (To record purchase of materials on account) b Work In Process - Weaving Dr 250000 Work In Process - Sewing Dr 78000 To Raw materials inventory 328000 (To record direct material usage) c Manufacturing overhead Dr 184000 To Raw materials inventory 184000 (To record Indirect material usage) d Work In Process - Weaving Dr 1325000 Work In Process - Sewing Dr 485000 To Factory wages payable 1810000 (To record direct labor incurred but not paid) e Manufacturing overhead Dr 1525000 To Factory wages payable 1525000 (To record Indirect labor incurred but not paid) f Manufacturing overhead Dr 204000 To Other accounts 204000 (To record cost of other overheads) g Work In Process - Weaving Dr 1060000 Work In Process - Sewing Dr 776000 To Manufacturing overhead 1836000 (To record application of overhead) h Factory wages payable Dr 3335000 To Cash 3335000 (To record payment of factory payroll)

Business

Accounting

Pro-Weave manufactures stadium blankets by passing the products through a weaving department and a sewing department. The following information is available regarding its June inventories: Beginning Inventory 144,000 470,000 640,000 1,486,000 Ending Inventory $ 201,000 Raw materials inventory Work in process inventory-Weaving Work in process inventory-Sewing Finished goods inventory 525,000 890,000 1,356,000 The following additional information describes the company's manufacturing activities for June: Raw materials purchases (on credit) Factory wages cost (paid in cash) Other factory overhead cost (Other Accounts credited) Materials used 2$ 3,335,000 204,000 535,000 Direct-Weaving Direct-Sewing Indirect 250,000 78,000 184,000 $ Labor used Direct-Weaving Direct-Sewing Indirect $1,325,000 485,000 1,525,000 Overhead rates as a percent of direct labor Weaving Sewing Sales (on credit) 808 160% $4,350,000

Pro-Weave manufactures stadium blankets by passing the products through a weaving department and a sewing department. The following information is available regarding its June inventories: Beginning Inventory 144,000 470,000 640,000 1,486,000 Ending Inventory $ 201,000 Raw materials inventory Work in process inventory-Weaving Work in process inventory-Sewing Finished goods inventory 525,000 890,000 1,356,000 The following additional information describes the company's manufacturing activities for June: Raw materials purchases (on credit) Factory wages cost (paid in cash) Other factory overhead cost (Other Accounts credited) Materials used 2$ 3,335,000 204,000 535,000 Direct-Weaving Direct-Sewing Indirect 250,000 78,000 184,000 $ Labor used Direct-Weaving Direct-Sewing Indirect $1,325,000 485,000 1,525,000 Overhead rates as a percent of direct labor Weaving Sewing Sales (on credit) 808 160% $4,350,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Concept explainers

Inventory Accounting

Inventory accounting is that branch of accounting that helps in determining the specific value of assets at different stages of production and development.

Question

1. Prepare journal entries dated June 30 to record: (a) raw materials purchases, (b) direct materials usage, (c) indirect materials usage, (d) direct labor usage, (e) indirect labor usage, (f) other overhead costs, (g) overhead applied, and (h) payment of total wages costs.

Definition Definition Indirect costs incurred while producing goods or services. Overhead costs cannot be directly attributed to products or services. Overhead includes indirect material cost, indirect labor cost, rent, utilities expenses, and depreciation. Since these costs directly affect the profitability of a company, managing overhead becomes an important task for management.

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