Backflush Costing. The Fast Manufacturing Company produces finished product within two days of the receipt of raw materials. Inventory accounts consist of a supplies account for indirect factory materials, a fin¬ ished goods account, and a combined raw and in process (RIP) inventory account. All conversion costs are charged to the cost of goods sold account. At the end of each month, all inventories are counted, their conver¬ sion cost components are estimated, and inventory account balances are adjusted. Raw material cost is back- flushed from RIP to Finished Goods and from Finished Goods to Cost of Goods Sold. The following information is a summary of selected transactions and other information for the month of June: LO7 Beginning balances in inventory accounts are:

Raw and InProcess. $ 41,600 FinishedGoods. 370,000 Supplies. 31,000 The June 1 RIP balance consisted of $40,000 cost of materials, most of which were not yet in process, plus a $1,600 conversion cost estimate assigned to partially processed work. The Finished Goods balance consisted of $190,000 material cost and a 5180,000 estimate of conversion cost.

June 30 inventories based on physical count:

Raw and InProcess. $ 47,900 FinishedGoods. 360,000 Supplies. 17,000 The June 30 RIP amount consisted of a $46,000 cost of materials, most of which were not yet in process, plus a $1,900 conversion cost estimate assigned to partially processed work. The Finished Goods amount con¬ sisted of $182,000 material cost and a $178,000 estimate of conversion cost.

(a) Direct materials received on credit cost $850,000.

(b) Indirect materials used cost $13,000.

(c) Gross payroll of 5400,000 is accrued; the payroll is paid.

(d) The payroll distribution was:

Directlabor. $ 60,000 Indirect factorylabor. 120,000 Marketingsalaries. 130,000 Administrativesalaries. 90,000

(e) Factory overhead costs:

Depreciation.

Insurance.

(0 Miscellaneous factory overhead costs:

Paid incash. $54,000 Onaccount. 29,000

(g) The factory overhead accumulated in the factory overhead control account was expensed to Cost of Goods Sold.

(h) The material cost component of completed work is backflushed from RIP.

(i) The material cost component of work sold is backflushed from Finished Goods.

(j) Ending balances are established in inventory accounts by adjusting their conversion cost components.

Required:

(1) Prepare journal entries based on the preceding information.

(2) Prepare completed T accounts for RIP, Finished Goods, and Cost of Goods Sold.