Required Record the transactions in T-accounts.
Financial Accounting
15th Edition
ISBN:9781337272124
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Carl Warren, James M. Reeve, Jonathan Duchac
Chapter5: Accounting Systems
Section: Chapter Questions
Problem 16E: The cash payments and purchases journals for Outdoor Artisan Landscaping follow. The accounts...
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Fanning Cola Corporation produces a new soft drink brand, Sweet Spring, using two production departments: mixing and bottling. Fanning’s beginning balances and data pertinent to the mixing department’s activities for Year 2 follow:
Accounts | Beginning Balances | ||
Cash | $ | 41,700 | |
Raw materials inventory | 14,600 | ||
Production supplies | 100 | ||
Work in process inventory (440,000 units) | 52,800 | ||
Common stock | $ | 109,200 | |
- Fanning Cola issued additional common stock for $56,000 cash.
- The company purchased raw materials and production supplies for $43,250 and $700, respectively, in cash.
- The company issued $45,700 of raw materials to the mixing department for the production of 500,000 units of Sweet Spring that were started in Year 2. A unit of soft drink is the amount needed to fill a bottle.
- The mixing department used 2,100 hours of labor during Year 2, consisting of 1,900 hours for direct labor and 200 hours for indirect labor. The average wage was $9.50 per hour. All wages were paid in Year 2 in cash.
- The predetermined overhead rate was $1.50 per direct labor hour.
- Actual overhead costs other than indirect materials and indirect labor for the year amounted to $700, which was paid in cash.
- The mixing department completed 700,000 units of Sweet Spring. The remaining inventory was 40 percent complete.
- The completed soft drink was transferred to the bottling department.
- The ending balance in the Production Supplies account was $550.
Required
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Record the transactions in T-accounts.
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