Basic cost system; journal entries; nancial statements similar to Self-Study Problem 1

The post-closing trial balance of Beamer Manufacturing Co. on April 30 is reproduced as follows: Beamer Manufacturing Co. Post-Closing Trial Balance April 30, 2011 Cash ....................................................$ 25,000

Accounts Receivable ............................. 65,000

Finished Goods ..................................... 120,000

Work in Process .....................................35,000

Materials .................................................18,000

Building ...................................................480,000

Accumulated DepreciationBuilding ..................................................$ 72,000

Factory Equipment .............................. ..220,000

Accumulated DepreciationFactory Equipment . . . .............................66,000

Ofce Equipment ................................ 60,000

Accumulated DepreciationOfce Equipment . . . ...............................36,000

Accounts Payable ................................ .................................................95,000

Capital Stock .................................... .....................................................250,000

RetainedEarnings ............................... ..................................................8 504,000

$ 1,023,000 $ 1,023,000

During the month of May, the following transactions took place:

a. Purchased raw materials at a cost of $45,000 and general factory supplies at a cost of $13,000 on account (recorded materials and supplies in the materials account).

b. Issued raw materials to be used in production, costing $47,000, and miscellaneous factory supplies, costing $15,000

c. Recorded the payroll, the payments to employees, and the distribution of the wages and salaries earned for the month as follows: factory wages (including $12,000 indirect labor), $41,000; and selling and administrative salaries, $7,000. Additional account titles include Wages Payable and Payroll. (Ignore payroll withholdings and deductions.)

d. Recognized depreciation for the month at an annual rate of 5% on the building, 10% on the factory equipment, and 20% on the ofce equipment. The sales and administrative staff uses approximately one-fth of the building for its ofces.

e. Incurred various other expenses totaling $11,000. One-fourth of this amount is allocable to the ofce function.

f. Transferred total factory overhead costs to Work in Process. g. Completed and transferred goods with a total cost of $91,000 to the nished goods storeroom.

h. Sold goods costing $188,000 for $362,000. (Assume that all sales were made on account.)

i. Collected accounts receivable in the amount of $345,000.

j. Paid accounts payable totaling $158,000. Required:

1. Prepare journal entries to record the transactions.

2. Set up T-accounts. Post the beginning trial balance and the journal entries prepared in (1) to the accounts and determine the balances in the accounts on May 31.

3. Prepare a statement of cost of goods manufactured, an income statement, and a balance sheet. (Round amounts to the nearest whole dollar.)