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Entries for Process Cost System Preston & Grover Soap Company manufactures powdered detergent. Phosphate is placed in process in the Making Department, where it is

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 $23,740
Work in ProcessMaking 9,230
Work in ProcessPacking 12,020
Materials 5,210

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 $295,680
b. Materials requisitioned for use
PhosphateMaking Department $195,320
PackagingPacking Department 67,940
Indirect materialsMaking Department 7,640
Indirect materialsPacking Department 2,740
c. Labor used
Direct laborMaking Department $139,540
Direct laborPacking Department 94,180
Indirect laborMaking Department 27,020
Indirect laborPacking Department 48,440
d. Depreciation charged on fixed assets
Making Department $25,480
Packing Department 21,040
e. Expired prepaid factory insurance
Making Department $4,830
Packing Department 1,930
f. Applied factory overhead
Making Department $66,590
Packing Department 73,570
g. Production costs transferred from Making Department to Packing Department $402,600
h. Production costs transferred from Packing Department to Finished Goods $633,620
i. Cost of goods sold during the period $635,940

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. 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

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