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	$7,010
Work in ProcessMaking	2,720
Work in ProcessPacking	3,550
Materials	1,540

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		$87,320
b.	Materials requisitioned for use
		PhosphateMaking Department	$57,680
		PackagingPacking Department	20,060
		Indirect materialsMaking Department	2,260
		Indirect materialsPacking Department	810
c.	Labor used
		Direct laborMaking Department	$41,210
		Direct laborPacking Department	27,820
		Indirect laborMaking Department	7,980
		Indirect laborPacking Department	14,310
d.	Depreciation charged on fixed assets
		Making Department	$7,520
		Packing Department	6,210
e.	Expired prepaid factory insurance
		Making Department	$1,430
		Packing Department	570
f.	Applied factory overhead
		Making Department	$19,670
		Packing Department	21,730
g.	Production costs transferred from Making Department to Packing Department		$118,900
h.	Production costs transferred from Packing Department to Finished Goods		$187,130
i.	Cost of goods sold during the period		$187,820

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.
b.
c.
d.
e.
f.
g.
h.
i.

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	$
Factory OverheadPacking Department	$