Backflush Costing Hepworth Company has implemented a JIT system and is considering the use of backflush costing Hepworth had the following transactions for the current fiscal year Purchased raw materials on account for $650,000 Placed all materials received into production Incurred actual direct labor costs of $97,500 Incurred actual overhead costs of $677,000 Applied conversion costs of $731,000 Completed all work for the month Sold all completed work Computed the difference between actual and applied costs Required Question Content Area 1 Prepare the journal entries for traditional costing 1 Accounts PayableAccounts ReceivableCashCost of Goods SoldFinished Goods InventoryMaterials InventoryOverhead ControlWages PayableWork in Process Inventory Select Accounts PayableAccounts ReceivableCost of Goods SoldFinished Goods InventoryMaterials InventoryOverhead ControlWages PayableWork in Process Inventory Select 2 Accounts PayableAccounts ReceivableCashCost of Goods SoldFinished Goods InventoryMaterials InventoryOverhead ControlWages PayableWork in Process Inventory Select Accounts PayableAccounts ReceivableCost of Goods SoldFinished Goods InventoryMaterials InventoryOverhead ControlWages PayableWork in Process Inventory Select 3 Accounts PayableAccounts ReceivableCashCost of Goods SoldFinished Goods InventoryMaterials InventoryOverhead ControlWages PayableWork in Process Inventory Select Accounts PayableAccounts ReceivableCost of Goods SoldFinished Goods InventoryMaterials InventoryOverhead ControlWages PayableWork in Process Inventory Select 4 Accounts PayableAccounts ReceivableCashCost of Goods SoldFinished Goods InventoryMaterials InventoryOverhead ControlWages PayableWork in Process Inventory Select Accounts PayableAccounts ReceivableCost of Goods SoldFinished Goods InventoryMaterials InventoryOverhead ControlWages PayableWork in Process Inventory Select 5 Accounts PayableAccounts ReceivableCashCost of Goods SoldFinished Goods InventoryMaterials InventoryOverhead ControlWages PayableWork in Process Inventory Select Accounts PayableAccounts ReceivableCost of Goods SoldFinished Goods InventoryMaterials InventoryOverhead ControlWages PayableWork in Process Inventory Select 6 Accounts PayableAccounts ReceivableCashCost of Goods SoldFinished Goods InventoryMaterials InventoryOverhead ControlWages PayableWork in Process Inventory Select Accounts PayableAccounts ReceivableCost of Goods SoldFinished Goods InventoryMaterials InventoryOverhead ControlWages PayableWork in Process Inventory Select 7 Accounts PayableAccounts ReceivableCashCost of Goods SoldFinished Goods InventoryMaterials InventoryOverhead ControlWages PayableWork in Process Inventory Select Accounts PayableAccounts ReceivableCost of Goods SoldFinished Goods InventoryMaterials InventoryOverhead ControlWages PayableWork in Process Inventory Select 8 Accounts PayableAccounts ReceivableCashCost of Goods SoldFinished Goods InventoryMaterials InventoryOverhead ControlWages PayableWork in Process Inventory Select Accounts PayableAccounts ReceivableCost of Goods SoldFinished Goods InventoryMaterials InventoryOverhead ControlWages PayableWork in Process Inventory Select Question Content Area Prepare the journal entries for backflush costing Assume there are two trigger points (1) the purchase of raw materials and (2) the completion of the goods If no entry is required, select No entry required and leave the amount boxes blank or enter 0 For a compound transaction, if an amount box does not require an entry, leave it blank 1 Accounts PayableConversion Cost ControlCost of Goods SoldNo entry requiredRaw Materials and In Process Inventory Select Accounts PayableConversion Cost ControlCost of Goods SoldFinished Goods InventoryNo entry required Select 2 Accounts PayableConversion Cost ControlCost of Goods SoldFinished Goods InventoryNo entry required Select Accounts PayableConversion Cost ControlCost of Goods SoldFinished Goods InventoryNo entry required Select 3 4 Accounts PayableCashConversion Cost ControlCost of Goods SoldNo entry required Select Select Conversion Cost ControlNo entry requiredWages Payable Select Select Accounts PayableConversion Cost ControlCost of Goods SoldFinished Goods InventoryNo entry required Select Select 5 Accounts PayableConversion Cost ControlCost of Goods SoldFinished Goods InventoryNo entry required Select Accounts PayableConversion Cost ControlCost of Goods SoldFinished Goods InventoryNo entry required Select 6 Accounts PayableConversion Cost ControlCost of Goods SoldFinished Goods InventoryNo entry required Select Select Accounts PayableCost of Goods SoldNo entry requiredRaw Materials and In Process Inventory Select Select Accounts PayableCashConversion Cost ControlFinished Goods InventoryNo entry required Select Select 7 Accounts PayableConversion Cost ControlCost of Goods SoldFinished Goods InventoryNo entry required Select Accounts PayableConversion Cost ControlCost of Goods SoldFinished Goods InventoryNo entry required Select 8 Accounts PayableConversion Cost ControlCost of Goods SoldFinished Goods InventoryNo entry required Select Accounts PayableConversion Cost ControlCost of Goods SoldFinished Goods InventoryNo entry required Select Question Content Area 2 Assume the second trigger point in Requirement 1 is the sale of goods If an amount box does not require an entry, leave it blank Conversion Cost ControlCost of Goods SoldRaw Materials and In Process Inventory Select Select Accounts PayableCashCost of Goods SoldFinished Goods InventoryRaw Materials and In Process Inventory Select Select Accounts PayableCashConversion Cost ControlCost of Goods SoldFinished Goods Inventory Select Select Question Content Area What would change for the backflush costing journal entries Entries 6 and 7 are replaced in req 1 No entry for transaction 1, transaction 6 is replaced in req 1 No entry for transaction 1 , transaction 7 is replaced in req 1 with the following entry Question Content Area 3 Assume there is only one trigger point and it is (a) completion of the goods or (b) sale of goods If an amount box does not require an entry, leave it blank Accounts PayableCashConversion Cost ControlFinished Goods Inventory Select Select Accounts PayableFinished Goods InventoryRaw Materials and In Process InventoryWages Payable Select Select Conversion Cost ControlFinished Goods InventoryRaw Materials and In Process InventoryWages Payable Select Select Question Content Area How would the backflush costing journal entries differ from Requirement 1 for (a) No entry for transaction 1, transaction 6 and 7 are replaced in req 1 No entry for transaction 1, transaction 6 is replaced in req 1 No entry for transaction 1 , transaction 7 is replaced in req 1 with the following entry Question Content Area How would the backflush costing journal entries differ from Requirement 1 for (b) If an amount box does not require an entry, leave it blank Accounts PayableConversion Cost ControlCost of Goods Sold Select Select Accounts PayableFinished Goods InventoryRaw Materials and In Process InventoryWages Payable Select Select Conversion Cost ControlFinished Goods InventoryRaw Materials and In Process InventoryWages Payable Select Select Question Content Area No entry for transaction 1, transaction 6 and 7 are replaced in req 1 No entry for transaction 1, transaction 6 is replaced in req 1 No entry for transaction 1 , transaction 7 is replaced in req 1 with the following entry

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Backflush Costing Hepworth Company has implemented a JIT system and is considering the use of backflush costing. Hepworth had the following transactions for the current

Backflush Costing

Hepworth Company has implemented a JIT system and is considering the use of backflush costing. Hepworth had the following transactions for the current fiscal year:

Purchased raw materials on account for $650,000.
Placed all materials received into production.
Incurred actual direct labor costs of $97,500.
Incurred actual overhead costs of $677,000.
Applied conversion costs of $731,000.
Completed all work for the month.
Sold all completed work.
Computed the difference between actual and applied costs.

Required:

Question Content Area

1. Prepare the journal entries for traditional costing.

1.	Accounts PayableAccounts ReceivableCashCost of Goods SoldFinished Goods InventoryMaterials InventoryOverhead ControlWages PayableWork-in-Process Inventory	- Select -
	Accounts PayableAccounts ReceivableCost of Goods SoldFinished Goods InventoryMaterials InventoryOverhead ControlWages PayableWork-in-Process Inventory		- Select -
2.	Accounts PayableAccounts ReceivableCashCost of Goods SoldFinished Goods InventoryMaterials InventoryOverhead ControlWages PayableWork-in-Process Inventory	- Select -
	Accounts PayableAccounts ReceivableCost of Goods SoldFinished Goods InventoryMaterials InventoryOverhead ControlWages PayableWork-in-Process Inventory		- Select -
3.	Accounts PayableAccounts ReceivableCashCost of Goods SoldFinished Goods InventoryMaterials InventoryOverhead ControlWages PayableWork-in-Process Inventory	- Select -
	Accounts PayableAccounts ReceivableCost of Goods SoldFinished Goods InventoryMaterials InventoryOverhead ControlWages PayableWork-in-Process Inventory		- Select -
4.	Accounts PayableAccounts ReceivableCashCost of Goods SoldFinished Goods InventoryMaterials InventoryOverhead ControlWages PayableWork-in-Process Inventory	- Select -
	Accounts PayableAccounts ReceivableCost of Goods SoldFinished Goods InventoryMaterials InventoryOverhead ControlWages PayableWork-in-Process Inventory		- Select -
5.	Accounts PayableAccounts ReceivableCashCost of Goods SoldFinished Goods InventoryMaterials InventoryOverhead ControlWages PayableWork-in-Process Inventory	- Select -
	Accounts PayableAccounts ReceivableCost of Goods SoldFinished Goods InventoryMaterials InventoryOverhead ControlWages PayableWork-in-Process Inventory		- Select -
6.	Accounts PayableAccounts ReceivableCashCost of Goods SoldFinished Goods InventoryMaterials InventoryOverhead ControlWages PayableWork-in-Process Inventory	- Select -
	Accounts PayableAccounts ReceivableCost of Goods SoldFinished Goods InventoryMaterials InventoryOverhead ControlWages PayableWork-in-Process Inventory		- Select -
7.	Accounts PayableAccounts ReceivableCashCost of Goods SoldFinished Goods InventoryMaterials InventoryOverhead ControlWages PayableWork-in-Process Inventory	- Select -
	Accounts PayableAccounts ReceivableCost of Goods SoldFinished Goods InventoryMaterials InventoryOverhead ControlWages PayableWork-in-Process Inventory		- Select -
8.	Accounts PayableAccounts ReceivableCashCost of Goods SoldFinished Goods InventoryMaterials InventoryOverhead ControlWages PayableWork-in-Process Inventory	- Select -
	Accounts PayableAccounts ReceivableCost of Goods SoldFinished Goods InventoryMaterials InventoryOverhead ControlWages PayableWork-in-Process Inventory		- Select -

Question Content Area

Prepare the journal entries for backflush costing. Assume there are two trigger points: (1) the purchase of raw materials and (2) the completion of the goods. If no entry is required, select "No entry required" and leave the amount boxes blank or enter "0". For a compound transaction, if an amount box does not require an entry, leave it blank.

1.	Accounts PayableConversion Cost ControlCost of Goods SoldNo entry requiredRaw Materials and In Process Inventory	- Select -
	Accounts PayableConversion Cost ControlCost of Goods SoldFinished Goods InventoryNo entry required		- Select -
2.	Accounts PayableConversion Cost ControlCost of Goods SoldFinished Goods InventoryNo entry required	- Select -
	Accounts PayableConversion Cost ControlCost of Goods SoldFinished Goods InventoryNo entry required		- Select -
3 & 4.	Accounts PayableCashConversion Cost ControlCost of Goods SoldNo entry required	- Select -	- Select -
	Conversion Cost ControlNo entry requiredWages Payable	- Select -	- Select -
	Accounts PayableConversion Cost ControlCost of Goods SoldFinished Goods InventoryNo entry required	- Select -	- Select -
5.	Accounts PayableConversion Cost ControlCost of Goods SoldFinished Goods InventoryNo entry required	- Select -
	Accounts PayableConversion Cost ControlCost of Goods SoldFinished Goods InventoryNo entry required		- Select -
6.	Accounts PayableConversion Cost ControlCost of Goods SoldFinished Goods InventoryNo entry required	- Select -	- Select -
	Accounts PayableCost of Goods SoldNo entry requiredRaw Materials and In Process Inventory	- Select -	- Select -
	Accounts PayableCashConversion Cost ControlFinished Goods InventoryNo entry required	- Select -	- Select -
7.	Accounts PayableConversion Cost ControlCost of Goods SoldFinished Goods InventoryNo entry required	- Select -
	Accounts PayableConversion Cost ControlCost of Goods SoldFinished Goods InventoryNo entry required		- Select -
8.	Accounts PayableConversion Cost ControlCost of Goods SoldFinished Goods InventoryNo entry required	- Select -
	Accounts PayableConversion Cost ControlCost of Goods SoldFinished Goods InventoryNo entry required		- Select -

Question Content Area

2. Assume the second trigger point in Requirement 1 is the sale of goods. If an amount box does not require an entry, leave it blank.

Conversion Cost ControlCost of Goods SoldRaw Materials and In Process Inventory	- Select -	- Select -
Accounts PayableCashCost of Goods SoldFinished Goods InventoryRaw Materials and In Process Inventory	- Select -	- Select -
Accounts PayableCashConversion Cost ControlCost of Goods SoldFinished Goods Inventory	- Select -	- Select -

Question Content Area

What would change for the backflush-costing journal entries?

Entries 6 and 7 are replaced in req 1.No entry for transaction 1, transaction 6 is replaced in req 1.No entry for transaction 1 , transaction 7 is replaced in req. 1.

with the following entry.

Question Content Area

3. Assume there is only one trigger point and it is (a) completion of the goods or (b) sale of goods. If an amount box does not require an entry, leave it blank.

Accounts PayableCashConversion Cost ControlFinished Goods Inventory	- Select -	- Select -
Accounts PayableFinished Goods InventoryRaw Materials and In Process InventoryWages Payable	- Select -	- Select -
Conversion Cost ControlFinished Goods InventoryRaw Materials and In Process InventoryWages Payable	- Select -	- Select -

Question Content Area

How would the backflush costing journal entries differ from Requirement 1 for (a)?

No entry for transaction 1, transaction 6 and 7 are replaced in req 1.No entry for transaction 1, transaction 6 is replaced in req 1.No entry for transaction 1 , transaction 7 is replaced in req. 1.

with the following entry.

Question Content Area

How would the backflush costing journal entries differ from Requirement 1 for (b)? If an amount box does not require an entry, leave it blank.

Accounts PayableConversion Cost ControlCost of Goods Sold	- Select -	- Select -
Accounts PayableFinished Goods InventoryRaw Materials and In Process InventoryWages Payable	- Select -	- Select -
Conversion Cost ControlFinished Goods InventoryRaw Materials and In Process InventoryWages Payable	- Select -	- Select -

Question Content Area

No entry for transaction 1, transaction 6 and 7 are replaced in req 1.No entry for transaction 1, transaction 6 is replaced in req 1.No entry for transaction 1 , transaction 7 is replaced in req. 1.

with the following entry.