Selected account balances and transactions of Alpine Manufac- turing Co. follow: Account Balances May 1 May 31 Raw materials . . . .................................. $ 6,000 $ 5,500 Factory supplies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 800 900 Work in process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,500 6,500 Finished goods .................................... 12,000 13,200 May Transactions: a. Purchased raw materials and factory supplies on account at costs of $45,000 and $10,000, respectively. (One inventory account is maintained.) b. Incurred wages during the month of $65,000 ($15,000 was for indirect labor). c. Incurred factory overhead costs in the amount of $42,000 on account. d. Made adjusting entries to record $10,000 of factory overhead for items such as depreciation (credit Various Credits). Fac- tory overhead was closed to Work in Process. Completed jobs were transferred to Finished Goods, and the cost of jobs sold was charged to Cost of Goods Sold. Required: Prepare journal entries for the following: 1. The purchase of raw materials and factory supplies. 2. The issuance of raw materials and supplies into production. (Hint: Be certain to consider the beginning and ending bal- ances of raw materials and supplies as well as the amount of the purchases.) 3. The recording of the payroll. 4. The distribution of the payroll. 5. The payment of the payroll. 6. The recording of factory overhead incurred. LO5 Chapter 1 – Introduction to Cost Accounting 57 7. The adjusting entry for factory overhead. 8. The entry to transfer factory overhead costs to Work in Process. 9. The entry to transfer the cost of completed work to Finished Goods. (Hint: Be sure to consider the beginning and ending balances of Work in Process as well as the costs added to Work in Process this period.) 10. The entry to record the cost of goods sold. (Hint: Be sure to consider the beginning and ending balances of Finished Goods as well as the cost of the goods finished during the month.)
Selected account balances and transactions of Alpine Manufac-
turing Co. follow:
Account Balances
May 1 May 31
Raw materials . . . .................................. $ 6,000 $ 5,500
Factory supplies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 800 900
Work in process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,500 6,500
Finished goods .................................... 12,000 13,200
May Transactions:
a. Purchased raw materials and factory supplies on account at
costs of $45,000 and $10,000, respectively. (One inventory
account is maintained.)
b. Incurred wages during the month of $65,000 ($15,000 was for
indirect labor).
c. Incurred
account.
d. Made
for items such as
tory overhead was closed to Work in Process. Completed
jobs were transferred to Finished Goods, and the cost of jobs
sold was charged to Cost of Goods Sold.
Required:
Prepare
1. The purchase of raw materials and factory supplies.
2. The issuance of raw materials and supplies into production.
(Hint: Be certain to consider the beginning and ending bal-
ances of raw materials and supplies as well as the amount of
the purchases.)
3. The recording of the payroll.
4. The distribution of the payroll.
5. The payment of the payroll.
6. The recording of factory overhead incurred.
LO5
Chapter 1 – Introduction to Cost Accounting 57
7. The adjusting entry for factory overhead.
8. The entry to transfer factory overhead costs to Work in Process.
9. The entry to transfer the cost of completed work to Finished
Goods. (Hint: Be sure to consider the beginning and ending
balances of Work in Process as well as the costs added to
Work in Process this period.)
10. The entry to record the cost of goods sold. (Hint: Be sure to
consider the beginning and ending balances of Finished
Goods as well as the cost of the goods finished during the
month.)
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