E2-17

Davis Co. uses backflush costing to account for its manufacturing costs. The trigger points are the purchase of materials, the completion of goods, and the sale of goods. Prepare journal entries to account for the following: a. Purchased raw materials, on account, $70,000. b. Requisitioned raw materials to production, $70,000. c. Distributed direct labor costs, $15,000. d. Factory overhead costs incurred $45,000. (Use Various Credits for the account in the credit part of the entry.) e. Completed all of the production started. f. Sold the completed production for $195,000, on account.

E2-18

For E2-17 prepare any journal entries that would have been different if the only trigger points had been the purchase of materials and the sale of finished goods.