Question

Preston & Grover Soap Company manufactures powdered detergent. Phosphate is placed in process in the Making...

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

Homework Answers

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
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