Question

2. During February, the following transactions were recorded at Cuenca Corporation. The company uses process costing.

(1)	Raw materials that cost $38,300 are withdrawn from the storeroom for use in the Assembly Department. All of these raw materials are classified as direct materials.
(2)	Direct labor costs of $21,700 are incurred, but not yet paid, in the Assembly Department.
(3)	Manufacturing overhead of $45,200 is applied in the Assembly Department using the department’s predetermined overhead rate.
(4)	Units with a carrying cost of $86,500 finish processing in the Assembly Department and are transferred to the Painting Department for further processing.
(5)	Units with a carrying cost of $109,100 finish processing in the Painting Department, the final step in the production process, and are transferred to the finished goods warehouse.
(6)	Finished goods with a carrying cost of $106,100 are sold.

Required:

Prepare journal entries for each of the transactions listed above.

Answer 1

	General Journal	Debit	Credit
(1)	Work in Process-Assembly Department	$38,300
	Raw Materials		$38,300
(2)	Work in Process-Assembly Department	$21,700
	Salaries and Wages Payable		$21,700
(3)	Work in Process-Assembly Department	$45,200
	Manufacturing Overhead		$45,200
(4)	Work in Process-Painting Department	$86,500
	Work in Process-Assembly Department		$86,500
(5)	Finished Goods	$109,100
	Work in Process-Painting Department		$109,100
(6)	Cost of Goods Sold	$106,100
	Finished Goods		$106,100