Hero Stars produces stars for elementary teachers to reward their students. Hero Stars' trial balance on June 1 follows:

HERO STARS

Trial Balance

June 1, 2018

June 1 balances in the subsidiary ledgers were as follows:
• Raw Materials Inventory subsidiary ledger: Paper, $5,000; indirect materials, $1,300
• Work-in-Process Inventory subsidiary ledger: Job 120, $39,400; Job 121, $0
• Finished Goods Inventory subsidiary ledger: Large Stars, $9,900; Small Stars, $11,400
June transactions are summarized as follows:
a. Collections on account, $141,000.
b. Selling and administrative expenses incurred and paid, $22,000.
c. Payments on account, $35,000.
d. Materials purchases on account: Paper, $25,500; indirect materials, $4,100.
e. Materials requisitioned and used in production:
Job 120: Paper, $800
Job 121: Paper, $7,900
Indirect materials, $1,700
f. Wages incurred during June, $40,000. Labor time records for the month: Job 120, $3,800; Job 121, $18,800; indirect labor, $17,400.
g. Wages paid in June include the balance in Wages Payable at May 31 plus $37,200 of wages incurred during June.
h. Depreciation on plant and equipment, $3,100.
i. Manufacturing overhead allocated at the predetermined overhead allocation rate of 50% of direct labor cost.
j. Jobs completed during the month: Job 120 with 700,000 Large Stars at a total cost of $45,900.
k. Sales on account: all of Job 120 for $104,000.
l. Adjusted for over allocated or under allocated manufacturing overhead.

Requirements
1. Journalize the transactions for the company.
2. Open T-accounts for the general ledger, the Raw Materials Inventory subsidiary ledger, the Work-in-Process Inventory subsidiary ledger, and the Finished Goods Inventory subsidiary ledger. Insert each account balance as given, and use the reference Bal. Post the journal entries to the T-accounts using the transaction letters as a reference.
3. Prepare a trial balance at June 30, 2018.
4. Use the Work-in-Process Inventory T-account to prepare a schedule of cost of goods manufactured for the month of June.
5. Prepare an income statement for the month of June?

Transcribed Image Text:

Balance Account Title Debit Credit $ 25,000 Cash 190,000 Accounts Receivable Inventories: Raw Materials 6,300 39,400 Work-in-Process 21,300 Finished Goods Property, Plant, and Equipment 270,000 $ 71,000 Accumulated Depreciation 129,000 Accounts Payable Wages Payable 1,800 Common Stock 138,000 Retained Earnings 212,200 Sales Revenue Cost of Goods Sold Manufacturing Overhead Selling and Administrative Expenses $ 552,000 $ 552,000 Totals