1. Cost of Production and Journal Entries

   Lighthouse Paper Company manufactures newsprint. The product is manufactured in two departments, Papermaking and Converting. Pulp is first placed into a vessel at the beginning of papermaking production. The following information concerns production in the Papermaking Department for March.

   Account Work in ProcessPapermaking Department							Account No.
   Date		Item	Debit		Credit		Balance
   							Debit		Credit
   Jan.	1	Bal., 5,200 units, 40% completed					8,112
   	31	Direct materials, 27,700 units	36,010				44,122
   	31	Direct labor	11,450				55,572
   	31	Factory overhead	6,442				62,014
   	31	Goods transferred, 30,900 units			?		?
   	31	Bal., 2,000 units, 50% completed					?

   a1. Prepare the March journal entry for the Papermaking Department for the materials charged to production.

   	Cash Factory Overhead Finished Goods Materials-Pulp Work in Process-Converting Department Work in Process-Papermaking Department
   	Cash Factory Materials-Pulp Wages Payable Work in Process-Converting Department Work in Process-Papermaking Department

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   a2. Prepare the March journal entry for the Papermaking Department for the conversion costs charged to production. If an amount box does not require an entry, leave it blank.

   	Cash Finished Goods Materials Wages Expense Work in Process-Converting Department Work in Process-Papermaking Department
   	Accounts Receivable Cash Cost of Goods Sold Wages Payable Work in Process-Converting Department Work in Process-Papermaking Department
   	Accounts Payable Cash Factory Overhead Materials Work in Process-Converting Department Work in Process-Papermaking Department

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   a3. Prepare the March journal entry for the Papermaking Department for the completed production transferred to the Converting Department. If required, round your interim calculations to two decimal places and your final answer to the nearest dollar.

   	Cash Factory Overhead-Papermaking Department Finished Goods Materials Work in Process-Converting Department Work in Process-Papermaking Department
   	Accounts Payable Cash Factory Overhead-Papermaking Department Materials Work in Process-Converting Department Work in Process-Papermaking Department

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   b. Determine the Work in ProcessPapermaking Department March 31 balance. If required, round your interim calculations to two decimal places and your final answer to the nearest dollar. $