Question

Preston & Grover Soap Company manufactures powdered detergent. Phosphate is placed in process in the Making Department, where it is turned into granulars. The output of Making is transferred to the Packing Department, where packaging is added at the beginning of the process. On July 1, Preston & Grover Soap Company had the following inventories: Finished Goods $28,170 Work in Process—Making 10,950 Work in Process—Packing 14,270 Materials 6,180 Departmental accounts are maintained for factory overhead, which both have zero balances on July 1. Manufacturing operations for July are summarized as follows: a. Materials purchased on account $350,830 b. Materials requisitioned for use Phosphate—Making Department $231,750 Packaging—Packing Department 80,610 Indirect materials—Making Department 9,070 Indirect materials—Packing Department 3,250 c. Labor used Direct labor—Making Department $165,570 Direct labor—Packing Department 111,750 Indirect labor—Making Department 32,060 Indirect labor—Packing Department 57,480 d. Depreciation charged on fixed assets Making Department $30,230 Packing Department 24,960 e. Expired prepaid factory insurance Making Department $5,730 Packing Department 2,290 f. Applied factory overhead Making Department $79,010 Packing Department 87,290 g. Production costs transferred from Making Department to Packing Department $477,690 h. Production costs transferred from Packing Department to Finished Goods $751,810 i. Cost of goods sold during the period $754,560 Required: 1. Journalize the entries to record the operations, identifying each entry by letter. For a compound transaction, if an amount box does not require an entry, leave it blank. Item Account Debit Credit a. Materials 350,830 Accounts Payable 350,830 b. Work in Process-Making Department 231,750 Work in Process-Packing Department Factory Overhead-Making Department Factory Overhead-Packing Department Materials c. Work in Process-Making Department Work in Process-Packing Department Factory Overhead-Making Department Factory Overhead-Packing Department Wages Payable d. Factory Overhead-Making Department Factory Overhead-Packing Department Accumulated Depreciation e. Factory Overhead-Making Department Factory Overhead-Packing Department Prepaid Insurance f. Work in Process-Making Department Work in Process-Packing Department Factory Overhead-Making Department Factory Overhead-Packing Department g. Work in Process-Packing Department Work in Process-Making Department h. Finished Goods Work in Process-Packing Department i. Cost of Goods Sold Finished Goods 2. Compute the July 31 balances of the inventory accounts. Materials $ Work in Process—Making Department $ Work in Process—Packing Department $ Finished Goods $ 3. Compute the July 31 balances of the factory overhead accounts. If required, use the minus sign to indicate a credit balance. Factory Overhead—Making Department $ Credit Factory Overhead—Packing Department $ Debit

Answer 1

Answer 1.
Journal Entry
Date	Particulars	Dr. Amt.	Cr. Amt.
a.	Materials	350,830.00
	Accounts Payable		350,830.00
b.	WIP - Making Department	231,750.00
	WIP - Packing Department	80,610.00
	Factory Overhead - Making Department	9,070.00
	Factory Overhead - Packing Department	3,250.00
	Materials		324,680.00
c.	WIP - Making Department	165,570.00
	WIP - Packing Department	111,750.00
	Factory Overhead - Making Department	32,060.00
	Factory Overhead - Packing Department	57,480.00
	Wages Payable		366,860.00
d.	Factory Overhead - Making Department	30,230.00
	Factory Overhead - Packing Department	24,960.00
	Accumulated Depreciation		55,190.00
e.	Factory Overhead - Making Department	5,730.00
	Factory Overhead - Packing Department	2,290.00
	Prepaid Insurance		8,020.00
f.	WIP - Making Department	79,010.00
	WIP - Packing Department	87,290.00
	Factory Overhead - Making Department		79,010.00
	Factory Overhead - Packing Department		87,290.00
g.	WIP - Packing Department	477,690.00
	WIP - Making Department		477,690.00
h.	Finished Goods	751,810.00
	WIP - Packing Department		751,810.00
i.	Cost of Goods Sold	754,560.00
	Finished Goods		754,560.00

Answer 2 & 3.
Materials					WIP - Making Department					WIP - Packing Department
Beg. Bal.	6,180.00	324,680.00	b.		Beg. Bal.	10,950.00	477,690.00	g.		Beg. Bal.	14,270.00	751,810.00	h.
a.	350,830.00				b.	231,750.00				b.	80,610.00
					c.	165,570.00				c.	111,750.00
					f.	79,010.00				f.	87,290.00
										g.	477,690.00
End. Bal.	32,330.00				End. Bal.	9,590.00				End. Bal.	19,800.00
Factory Overhead - Making Department					Factory Overhead - Packing Department					Finished Goods
Beg. Bal.	-	79,010.00	f.		Beg. Bal.	-	87,290.00	f.		Beg. Bal.	28,170.00	754,560.00	i.
b.	9,070.00				b.	3,250.00				h.	751,810.00
c.	32,060.00				c.	57,480.00
d.	30,230.00				d.	24,960.00
e.	5,730.00				e.	2,290.00
End. Bal.	(1,920.00)				End. Bal.	690.00				End. Bal.	25,420.00