recorded the following transactions for the just completed m

recorded the following transactions for the just completed month. The company had no beginning inventories (a) $72,000 in raw materials were purchased for cash (b) $67,000 in materials and the remainder was for indirect materials. raw materials were requisitioned for use in production. of this amount, $56,000 was for direct (c) Total $18,000 was for indirect labor labor wages of $112,000 were incurred and paid in cash. Of this amount, $94,000 was for direct labor and d) Additional manufacturing overhead costs of $108,000 were incurred and paid in cash. (e) Manufacturing over rate. head costs of $130,000 were applied to jobs using the company\'s predetermined overhead (f) All of the jobs worked on during the month were completed and shipped to customers. (8) The underapplied or overapplied overhead for the month was closed out to Cost of Goods Sold. Required: a. Prepare journal entries for the above transactions and then post to T-accounts. b. Determine the cost of goods manufactured. c. Determine the cost of goods sold (after closing Manufacturing Overhead). Debit eDIt Credit otexcial Cosh A. 11000 Rau moterial Cosh 112 000 8.00

Solution

Requirement a. Journal entries are as follows:

Requirement b: Cost of Goods manufactured is as follows:

Requirement c: Cost of Goods sold is as follows:

IN THE BOOKS OF ALDEN COMPANY
IN THE BOOKS OF ALDEN COMPANY
S.NO.	ACCOUNTS TITLES AND EXPLANATIONS	DEBIT IN $	CREDIT IN $
a.	Raw material Inventory Dr.		72,000
	Cash Account				72,000
	(For raw material purchased)
b.	Work in process Inventory Dr.		56,000
	Manufacturing overheads Account Dr.	11,000
	Raw material Inventory Account		67,000
	(for raw material issued as direct and indirect material)
c	Wages Payable Dr.			112,000
	Cash Account				112,000
	(for wages incurred )
	Work in Process Inventory Dr.		94,000
	Manufacturing overheads Account Dr.	18,000
	Wages payable				112,000
	(for wages charged to work in process and overheads Account)
d.	Manufacturing overheads Account Dr.	108,000
	Cash Account				108,000
	(For manufacturing overheads incurred for production)
e.	Work in Process Inventory Dr.		130,000
	Manufacturing overhead account		130,000
	(For manufacturing overhead applied during the month)
e.	Finished Goods Inventory		280,000
	Work in Process Inventory			280,000
	(For transferring completed goods to next process)
f.	Cost of Goods sold account Dr.		280,000
	Finished Goods Inventory Account		280,000
	(for cost of goods sold transferred from finished goods)
g.	Cost of Goods sold account Dr.		7,000
	Manufacturing overheads Account		7,000
	(for underapplied overheads charged to cost of goods sold)