Comprehensive Problem Major League Bat Company (Algo) Major League Bat Company manufactures baseball bats. In addition to its work in process inventories, the company maintains inventories of raw materials and finished goods. It uses raw materials as direct materials in production and as indirect materials. Its factory payroll costs include direct labor for production and indirect labor. All materials are added at the beginning of the process, and conversion costs are applied uniformly throughout the production process. Required: You are to maintain records and produce measures of inventories to reflect the July events of this company. The June 30 balances: Raw Materials Inventory, $35,000; Work in Process Inventory. $10,065 ($3,460 of direct materials and $6,605 of conversion); Finished Goods Inventory, $160,000; Sales, $0; Cost of Goods Sold, $0; Factory Payroll Payable, $0; and Factory Overhead, $0. 1. Prepare journal entries to record the following July transactions and events. a. Purchased raw materials for $195,000 cash. b. Used raw materials as follows: direct materials, $61,340; and indirect materials, $18,000. c. Recorded factory wages payable costs as follows: direct labor, $222,250; and indirect labor, $33,000. d. Incurred other actual factory overhead costs of $60,125 paid in cash. e. Applied factory overhead to production at 50% of direct labor costs. 2. Information about the July work in process (WIP) Inventory follows. Use this information with that from part 1 to prepare a production cost report, assuming the weighted average method is used. 2. Information about the July work in process (WIP) Inventory follows. Use this information with that from part 1 to prepare a production cost report, assuming the weighted average method is used. Unita Started Beginning WIP inventory 11,000 units 13,000 units Units transferred out 17,000 units Ending WIP inventory 7,000 units Beginning WIP Inventory Direct materials-Percent complete Conversion-Percent complete Ending WIP Inventory Direct materials-Percent complete Conversion-Percent complete 100% 70% 100% 30 3. Using the results from part 2 and the available information, make computations and prepare journal entries to record the following: f. Total costs transferred to finished goods for July. g. Sale of finished goods costing $305,700 for $705,000 in cash. 4. Post entries from parts 1 and 3 to the following general ledger accounts. 5. Compute the amount of gross profit from the sales in July. Prepare journal entries to record the following July transactions and events. a. Purchased raw materials for $195,000 cash. b. Used raw materials as follows: direct materials, $61,340; and indirect materials, $18,000. c. Recorded factory wages payable costs as follows: direct labor, $222,250; and indirect labor, $33,000. d. Incurred other actual factory overhead costs of $60,125 paid in cash. e. Applied factory overhead to production at 50% of direct labor costs. View transaction list Journal entry worksheet Record the purchase of raw materials for cash. Note: Enter debits before credits. 6 7 Transaction General Journal Debit Credit a. Raw materials inventory 195,000 Cash 195,000 Show Journal entry worksheet < 1 2 3 5 6 7 > Record the use of direct materials. Note: Enter debits before credits. Transaction General Journal Debit Credit b1. Work in process inventory 61,340 Raw materials inventory 61,340 Journal entry worksheet 1 2 3 Record the use of indirect materials. Note: Enter debits before credits. 5 6 7 > Transaction General Journal Debit Credit b2. Factory overhead 18,000 Raw materials inventory 18,000 Record entry Clear entry View general journal Journal entry worksheet < 1 2 3 4 5 6 7 Record the direct labor cost incurred, but not yet paid. Note: Enter debits before credits. Transaction General Journal Debit Credit c1. Work in process inventory Factory wages payable Record entry Clear entry View general journal Journal entry worksheet 1 2 3 5 67 Record the indirect labor cost incurred, but not yet paid. Note: Enter debits before credits. Transaction c2. General Journal Debit Credit Record entry Clear entry View general journal Journal entry worksheet < 2 3 4 5 6 7 > Record other overhead paid in cash. Note: Enter debits before credits. Transaction d. General Journal Debit Credit Record entry Clear entry View general journal Journal entry worksheet < 1 2 3 4 5 6 7 Record overhead applied at 50% of direct labor. Note: Enter debits before credits. Transaction General Journal Debit Credit Record entry Clear entry View general journal Information about the July work in process (WIP) inventory follows. Use this information with that from part 1 to prepare a production cost report, assuming the weighted average method is used. (Round "Cost per EUP" to 2 decimal places.) Unit reconciliation: Units to account for: Total units to account for Units accounted for: Total units accounted for Equivalent units of production (EUP) Equivalent Units of Production Cost per equivalent unit of production Total costs Equivalent units of production Direct Materials Conversion Units % Complete EUP % Complete EUP Direct Materials Conversion Costs Costs EUP EUP 14 dalmat A ^! Equivalent Units of Production) Cost per equivalent unit of production Total costs +Equivalent units of production Cost per equivalent unit of production (rounded to 2 decimals) Cost Assignment Completed and transferred out Direct materials Conversion Ending work in process Direct materials Conversion Direct Materials Costs EUP EUP Cost per EUP Total cost Conversion Costs EUP 0 0 EUP Cost per EUP Total cost $ 0.00 $ 0 $ 0.00 0 Total costs accounted for Using the results from part 2 and the available information, make computations and prepare journal entries to record the following: f. Total costs transferred to finished goods for July. g. Sale of finished goods costing $305,700 for $705,000 in cash. View transaction list Journal entry worksheet 1 2 3 Record the transfer of goods to Finished Goods Inventory. Note: Enter debits before credits. Transaction f. General journal Debit Credit Show less A Journal entry worksheet < 1 2 3 Record sale of finished goods for cash. Note: Enter debits before credits. Transaction g1. General journal Debit Credit > Journal entry worksheet < 1 2 3 Record the cost of goods sold. Note: Enter debits before credits. Transaction General journal Debit Credit g2. Post entries from parts 1 and 3 to the following general ledger accounts. Raw Materials Inventory Date June 30 Date June 30 Debit Finished Goods Inventory Debit Account Number 132 Credit Balance Date Work in Process Inventory Debit Credit 35,000 June 30 Account Number 133 Balance 10,065 Account Number 135 Credit Balance Date Factory Wages Payable Debit Account Number 212 Credit Balance 160,000 Sales Account Number 413 Cost of Goods Sold Date Debit Credit Balance Date Debit Credit Account Number 502 Balance Date Factory Overhead Debit Credit Account Number 540 Balance Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Compute the amount of gross profit from the sales in July. Gross profit < Required 4 Required 5 >