Journalizing and posting transactions. The Nadal Company manufactures a single product. On June 1, 19X7, the company’s inventory accounts showed the following balances:

Transactions that occurred during the month of June are summarized below.

a. Raw materials were purchased on credit for $38,400.

b. Direct materials costing $35,071 and indirect materials costing $6,189 were used during the month.

c. Factory wages eared during June totaled $54,625. (Credit Salaries and Wages Payable 202; payroll taxes should be ignored.)

d. Direct labor costs for the month amounted to $43,700, and indirect labor costs amounted to $10,925.
Additional factory costs incurred are as follows:

e. Employer's payroll taxes, $5,720 (credit Taxes Payable 212).

f. Machinery repairs, $1,430 (credit Vouchers Payable 201).

g. Depreciation for the month on the factory building, $490; on the factory equip- ment, $2,030.

h. Factory insurance expired, $220.

i. Property taxes accrued, $710.

j. Manufacturing overhead chargeable to Work in Process is estimated at $27,091.

k. Jobs completed and transferred to finished goods cost $104,157.

l. Cost of goods sold during the month, $107,822. Price of goods sold (on credit) during the month $140,160. (Prepare two entries.)

Instructions 1. Open accounts for Raw Materials 121, Work in Process 122, Finished Goods 126, Sales 401, Cost of Goods Sold 415, Factory Payroll Clearing 500, and Manufacturing Overhead Control 501.

2. Enter the beginning balances in the three inventory accounts.

3. Record the above transactions in general journal form. Date the entries June 30.

4. Post to the accounts provided. (No accounts have been opened for some asset and liability items.)

5. Prepare a schedule of manufacturing overhead costs showing the underapplied or overapplied overhead and the overhead applied to production, and prepare a statement of cost of goods manufactured.

6. Prepare an income statement for the month, assuming that selling expenses to- taled $11,800 and that general and administrative expenses totaled $4,720.

Transcribed Image Text:

Raw Materials Work in Process $32,750 22,900 Finished Goods 39.500