Ht.12. The records of Tillman Corporation's initial and unaudited accounts show the following ending inventory balances, which must beadjusted to actual costs:UnitsWork-in-process inventory 48,000Finished goods inventory 15,000UnauditedCosts$ 242,880105,300As the auditor, you have learned the following information. Ending work-in-process inventory is 35 percent complete with respect toconversion costs. Materials are added at the beginning of the manufacturing process, and overhead is applied at the rate of 90percent of the direct labor costs. There was no finished goods inventory at the start of the period. The following additional informationis also available:Beginning inventory (25% complete as to labor)Units startedCurrent costsUnits completed and transferred to finished goodsinventoryUnits32,000118,000102,000CostsDirect Materials$116,640436,860Direct Labor$ 14,240199,600Required:a. Prepare a production cost report for Tillman using the weighted-average method.b. Show the journal entry required to correct the difference between the unaudited records and actual ending balances of Work-in-Process Inventory and Finished Goods Inventory. Debit or credit Cost of Goods Sold for any difference.c. If the adjustment in requirement (b) is not made, will the company's income and inventories be overstated or understated?

Process CostingOperation costing method employed to determine the value of a product at each process…

The records of Tillman Corporation's initial and unaudited accounts show the following ending inventory balances, which must be adjusted to actual costs: Units Work-in-process inventory 48,000 Finished goods inventory 15,000 Unaudited Costs $ 242,880 105,300 As the auditor, you have learned the following information. Ending work-in-process inventory is 35 percent complete with respect to conversion costs. Materials are added at the beginning of the manufacturing process, and overhead is applied at the rate of 90 percent of the direct labor costs. There was no finished goods inventory at the start of the period. The following additional information s also available: Beginning inventory (25% complete as to labor) Units started Current costs Units completed and transferred to finished goods inventory Units 32,000 118,000 102,000 Costs Direct Materials $116,640 436,860 Direct Labor $ 14,240 199,600 Required: a. Prepare a production cost report for Tillman using the weighted-average method. . Show the journal entry required to correct the difference between the unaudited records and actual ending balances of Work-in- Process Inventory and Finished Goods Inventory. Debit or credit Cost of Goods Sold for any difference. c. If the adjustment in requirement (b) is not made, will the company's income and inventories be overstated or understated?

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter2: Accounting For Materials

Section: Chapter Questions

Problem 13P: Webster Company uses backflush costing to account for its manufacturing costs. The trigger points...