Entries forProcess 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$9,100Work in ProcessMaking3,540Work in ProcessPacking4,610Materials2,000

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$113,370b.Materials requisitioned for usePhosphateMaking Department$74,890PackagingPacking Department26,050Indirect materialsMaking Department2,930Indirect materialsPacking Department1,050c.Labor usedDirect laborMaking Department$53,500Direct laborPacking Department36,110Indirect laborMaking Department10,360Indirect laborPacking Department18,570d.Depreciation charged on fixed assetsMaking Department$9,770Packing Department8,070e.Expired prepaid factory insuranceMaking Department$1,850Packing Department740f.Applied factory overheadMaking Department$25,530Packing Department28,210g.Production costs transferred from Making Department to Packing Department$154,360h.Production costs transferred from Packing Department to Finished Goods$242,940i.Cost of goods sold during the period$243,830

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.

ItemAccountDebitCredita.Materials

Accounts Payable

b.Work in Process-Making Department

Work in Process-Packing Department

Factory Overhead-Making Department

Factory Overhead-Packing Department

Materials

c.Work in Process-Making Department

Work in Process-Packing Department

Factory Overhead-Making Department

Factory Overhead-Packing Department

Wages Payable

d.Factory Overhead-Making Department

Factory Overhead-Packing Department

Accumulated Depreciation

e.Factory Overhead-Making Department

Factory Overhead-Packing Department

Prepaid Insurance

f.Work in Process-Making Department

Work in Process-Packing Department

Factory Overhead-Making Department

Factory Overhead-Packing Department

g.Work in Process-Packing Department

Work in Process-Making Department

h.Finished Goods

Work in Process-Packing Department

i.Cost of Goods Sold

Finished Goods

2.Compute the July 31 balances of the inventory accounts.

Materials$Work in ProcessMaking Department$Work in ProcessPacking Department$Finished Goods$

3.Compute the July 31 balances of the factory overhead accounts. If required, use the minus sign to indicate a credit balance.

Factory OverheadMaking Department$ credit

Factory OverheadPacking Department$ Debit