Process Cost Journal Entries
The cost of materials transferred into the Rolling Department of Keystone Steel Company is $577,800 from the Casting Department. The conversion cost for the period in the Rolling Department is $112,500 ($68,500 factory overhead applied and $44,000 direct labor). The total cost transferred to Finished Goods for the period was $692,700. The Rolling Department had a beginning inventory of $28,000.
a1. Journalize the cost of transferred-in materials.
Work in Process-Rolling
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Work in Process-Casting
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Remember there are three classifications of inventory, raw materials, work in process, and finished goods.
a2. Journalize the conversion costs. If an amount box does not require an entry, leave it blank.
Work in Process-Rolling
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Factory Overhead-Rolling
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Wages Payable
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Feedback
Remember there are three classifications of inventory, raw materials, work in process, and finished goods.
a3. Journalize the costs transferred out to Finished Goods.
Finished Goods
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Work in Process-Rolling
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Feedback
Now that the units are completed how will that affect the asset accounts of the business? Remember there are three types of inventory, raw materials, work in process, and finished goods.
b. Determine the balance of Work in
Process—Rolling at the end of the period.
$
Solution a:
Journal Entries - Keystone Steel Company | |||
Event | Particulars | Debit | Credit |
a1 | Work in Process-Rolling Dr | $577,800.00 | |
To Work in Process-Casting | $577,800.00 | ||
(To record cost of material transferred In) | |||
a2 | Work in Process-Rolling Dr | $112,500.00 | |
To Wages Payable | $44,000.00 | ||
To Factory Overhead-Rolling | $68,500.00 | ||
(To record conversion costs) | |||
a3 | Finished goods Dr | $692,700.00 | |
To Work in Process-Rolling | $692,700.00 | ||
(To record cost of completed goods) |
Solution b:
Balance of Work In Process - Rolling = $28,000 + $577,800 + $112,500 - $692,700 = $25,600
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