Preston Grover Soap Company manufactures powdered detergent

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:

Departmental accounts are maintained for factory overhead, which both have zero balances on July 1.

Manufacturing operations for July are summarized as follows:

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.

2. Compute the July 31 balances of the inventory accounts.

3. Compute the July 31 balances of the factory overhead accounts.

Solution

      
Item Account    Debit Credit
      
a. Materials    3,33,980
Accounts payable     3,33,980
      
      
b. work in process-Making Deptt    2,20,620
work in process-pcking Deptt    76,740
Factory overhead -making Deptt    8,630
Factory overhead -packing Deptt    3,100
Materials     3,09,090
      
      
c. work in process-Making Deptt    1,57,610
work in process-pcking Deptt    1,06,380
Factory overhead -making Deptt    30,520
Factory overhead -packing Deptt    54,720
Wages payable     3,49,230
      
      
d. Factory overhead -making Deptt    28,780
Factory overhead -packing Deptt    23,760
Accumulated Depreciation     52,540
      
      
      
e Factory overhead -making Deptt    5,450
Factory overhead -packing Deptt    2,180
prepaid insurance     7,630
      
      
f. work in process-Making Deptt    75,210
work in process-pcking Deptt    83,100
Factory overhead -making Deptt     75,210
Factory overhead -packing Deptt     83,100
      
      
g. work in process-packing department    4,54,750
work in process-making department     4,54,750
      
      
h. finished goods    7,15,690
work in process-packing department     7,15,690
      
      
i. cost of goods sold    7,18,310
finished goods     7,18,310
      
      
      
2)      
materials    30,780
work in process -Making Department    9,110
work in process-Packing Department    18,860
finished goods    24,190
      
t-Accounts     
materials     
opening 5,890 Requistioned   3,09,090
purchases 3,33,980    
end bal 30,780    
      
work in process-making deptt     
opening 10,420    
DM 2,20,620 trfg -packing deptt  4,54,750
DL 1,57,610    
OH applied 75,210    
end bal 9,110    
      
work in process-pcking deptt     
opening 13,580    
trfd making 4,54,750    
DM 76,740 finished goods   7,15,690
DL 1,06,380    
OH applied 83,100    
end bal 18,860    
      
      
finished goods     
opening 26,810 cost of goods sold  7,18,310
WIP-packing 7,15,690    
end bal 24,190    
      
      
3)      
Factory overhea-making department    1,830 Credit
Factory overhead -packing department    470 Debit
      
      
Factory overhead-making department     
indirect mt 8,630 WIP  75,210
ind lab 30,520    
dep 28,780    
prepaid 5,450    
   end bal  1,830
      
      
Factory overhead-packing department     
indirect mt 3,100 WIP  83,100
ind lab 54,720    
dep 23,760    
prepaid 2,180    
end bal 470