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. Units Started 11,000 units. Beginning WIP inventory Units transferred out 13,000 units 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. 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 92. General journal Debit Credit