Determine flow of costs through accounts (Learning Objective 2 & 6)

Stewart Engine reconditions engine. Its job cost records yield the following information. Stewart Engine uses a perpetual inventory system.

Requirements

1. Compute Stewart Engine's cost of (a) Work in process inventory at June 30 and 31. (b) finished Goods Inventory at June 30 and July 31, and (c) Cost of Goods June and July.
2. Make summary journal entries to record the transfer of completed jobs from Work in Process Inventory to Finished Goods Inventory for June and July.
3. Record the sale of Job 5 on account for $1,900.
4. Compute the gross profit for Job 5. What costs must the gross profit cover.

Job No. Started Finished Sold Total Cost of Job at June30 Total Manufacturing Cost Added in July 6/9 $ 1,600 6/13$ 1,500 7/3 $1,300 7/1 $ 900 12 3 14 5 16 Date A 5/26 6/7 5/3 6/29 6/30 6/12 6/30 7/1 7/12 7/14 7/8 7/23 8/9 8/9 $300 $500 $1,400