Entries for Process Cost System

Preston & Grover Soap Company manufactures powdered detergent. Phosphate is placed in process in the Making Department, where it is turned into granulars. The output of Making is transferred to the Packing Department, where packaging is added at the beginning of the process. On July 1, Preston & Grover Soap Company had the following inventories:

Finished Goods	$6,150
Work in ProcessMaking	2,390
Work in ProcessPacking	3,120
Materials	1,350

Departmental accounts are maintained for factory overhead, which both have zero balances on July 1.

Manufacturing operations for July are summarized as follows:

a.	Materials purchased on account		$76,600
b.	Materials requisitioned for use:
		PhosphateMaking Department	$50,600
		PackagingPacking Department	17,600
		Indirect materialsMaking Department	1,980
		Indirect materialsPacking Department	710
c.	Labor used:
		Direct laborMaking Department	$36,150
		Direct laborPacking Department	24,400
		Indirect laborMaking Department	7,000
		Indirect laborPacking Department	12,550
d.	Depreciation charged on fixed assets:
		Making Department	$6,600
		Packing Department	5,450
e.	Expired prepaid factory insurance:
		Making Department	$1,250
		Packing Department	500
f.	Applied factory overhead:
		Making Department	$17,250
		Packing Department	19,060
g.	Production costs transferred from Making Department to Packing Department		$104,300
h.	Production costs transferred from Packing Department to Finished Goods		$164,150
i.	Cost of goods sold during the period		$164,750

Required:

1. Journalize the entries to record the operations, identifying each entry by letter. For a compound transaction, if an amount box does not require an entry, leave it blank.

Item Account Debit Credit a. 2. Compute the July 31 balances of the inventory accounts. Materials Work in Process-Making Department Work in Process-Packing Department Finished Goods 3. Compute the July 31 balances of the factory overhead accounts. Factory Overhead-Making Department Factory Overhead-Packing Department