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 Work in ProcessMaking Work in ProcessPacking Materials

$19,680 7,650 9,970 4,320

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 b. Materials requisitioned for use:

PhosphateMaking Department PackagingPacking Department Indirect materialsMaking Department Indirect materialsPacking Department

c. Labor used: Direct laborMaking Department Direct laborPacking Department Indirect laborMaking Department Indirect laborPacking Department

d. Depreciation charged on fixed assets: Making Department

Packing Department e. Expired prepaid factory insurance:

Making Department

Packing Department f. Applied factory overhead:

$245,120

$161,920 56,320 6,340 2,270

$115,680 78,080 22,400 40,160

$21,120 17,440

$4,000 1,600

$55,200 60,990 g. Production costs transferred from Making Department to Packing Department $333,760

Making Department

Packing Department

h. Production costs transferred from Packing Department to Finished Goods $525,280 i. Cost of goods sold during the period $527,200

Required: 1. Journalize the entries to record the operations. If an amount box does not require an entry, leave it blank.

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. Factory OverheadMaking Department $ !

Factory OverheadPacking Department $ !