Lubricants Inc produces a special kind of grease that is wid

Lubricants, Inc., produces a special kind of grease that is widely used by race car drivers. The grease is produced in two processing departments-Refining and Blending. Raw materials are introduced at various points in the Refining Department. The following incomplete Work in Process account is available for the Refining Department for March Work in Process-Refining Department March 1 balance 34,300Completed and transferred to Blending Materials Direct labor Overhead March 31 balance 156,600 68,200 488,000 The March 1 work in process inventory in the Refining Department consists of the following elements: materials, $8,800; direct labor, $4,000; and overhead, $21,500. Costs incurred during March in the Blending Department were: materials used, $45,000; direct labor, $16,700; and overhead cost applied to production, $104,000.

Solution

Jurnal Entry No. Account Titles and Explanation Debit Credit a. Work in process-Refining department $156,000.00 Work in process-Blending department $45,000.00 Raw Materials inventory $201,000.00 (To record direct materials used in production) b. Work in process-Refining department $68,200.00 Work in process-Blending department $16,700.00 Salary and Wages Payable $84,900.00 (To record direct labor costs incurred) c. Manufacturing overhead $656,000.00 Accounts Payable $656,000.00 (To record manufacturing overhead incurred) d. Work in process-Refining department $488,000.00 Work in process-Blending department $104,000.00 Manufacturing overhead $592,000.00 (To record manufacturing overhead applied) e. Work in process-Blending department $682,000.00 Work in process-Refining department $682,000.00 (To record transfers from Refining to Blending department) f. Finished goods inventory $700,000.00 Work in process-Blending department $700,000.00 (To record goods completed and transferred to finished goods) g. Accounts receivable $1,340,000.00 Sales revenue $1,340,000.00 (To record sales on account) Cost of goods sold $660,000.00 Finished goods inventory $660,000.00 (To record cost of sales) Raw Materials Inventory Debit Credit Beg. Bal. 209600 201000 a. End. Bal. 8600 Work in Process-Refining Department Debit Credit Beg. Bal. 34300 a. 156000 682000 e. b. 68200 d. 488000 End. Bal. 64500 Work in Process-Blending Department Debit Credit Beg. Bal.      53,000.00 a.      45,000.00    70,000.00 f. b.      16,700.00 d.    104,000.00 e.    682,000.00 End. Bal.    830,700.00 Wages Payable Debit Credit 84900 b. End. Bal. 84900 Manufacturing Overhead Debit Credit c. 656000 592000 d. End. Bal. 64000 Accounts Payable Debit Credit 656000 c. End. Bal. 656000 Finished Goods Inventory Debit Credit Beg. Bal. 11000 f. 700000 640000 g. End. Bal. 71000 Cost of Goods Sold (COGS) Debit Credit g. 660000 End. Bal. 660000 Sales Revenue Debit Credit 1340000 End. Bal. 1340000 Accounts Receivable Debit Credit g. 1340000 End. Bal. 1340000