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
Mar.	1	Bal., 7,300 units, 20% completed					23,360
	31	Direct materials, 38,900 units	77,800				101,160
	31	Direct labor	24,640				125,800
	31	Factory overhead	13,862				139,662
	31	Goods transferred, 43,400 units			?		?
	31	Bal., 2,800 units, 30% completed					?

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a1. Prepare the March journal entry for the Papermaking Department for the materials charged to production. If an amount box does not require an entry, leave it blank.

blank	Factory Overhead-Papermaking DepartmentFinished GoodsMaterials-PulpWork in Process-Converting DepartmentWork in Process-Papermaking DepartmentWork in Process-Papermaking Department	Work in Process-Papermaking Department	Work in Process-Papermaking Department
	Factory Overhead-Papermaking DepartmentFinished GoodsMaterials-PulpWork in Process-Converting DepartmentWork in Process-Papermaking DepartmentMaterials-Pulp	Materials-Pulp	Materials-Pulp

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a1. Remember there are three different types of inventory; materials, work in process, and finished goods.

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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.

blank	Factory OverheadMaterials-PulpWages ExpenseWork in Process-Converting DepartmentWork in Process-Papermaking DepartmentWork in Process-Papermaking Department	Work in Process-Papermaking Department	Work in Process-Papermaking Department
	CashCost of Goods SoldWages PayableWork in Process-Converting DepartmentWork in Process-Papermaking DepartmentWages Payable	Wages Payable	Wages Payable
	Accounts PayableCashFactory OverheadWork in Process-Converting DepartmentWork in Process-Papermaking DepartmentFactory Overhead	Factory Overhead	Factory Overhead

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a2. What types of costs are included in conversion costs? By adding these conversion costs are the units complete and ready for transfer?

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a3. Prepare the March journal entry for the Papermaking Department for the completed production transferred to the Converting Department. If an amount box does not require an entry, leave it blank. If required, round your interim calculations to two decimal places and your final answer to the nearest dollar.

blank	CashFinished GoodsMaterials-PulpWork in Process-Converting DepartmentWork in Process-Papermaking DepartmentWork in Process-Converting Department	Work in Process-Converting Department	Work in Process-Converting Department
	CashFinished GoodsMaterials-PulpWork in Process-Converting DepartmentWork in Process-Papermaking DepartmentWork in Process-Papermaking Department	Work in Process-Papermaking Department	Work in Process-Papermaking Department

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a3. Remember that each department has a work in process account. Are these units 100% complete and ready to be sold or are they still in process?

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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. $fill in the blank 10999ff3103807c_1