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	$21,650
Work in ProcessMaking	8,410
Work in ProcessPacking	10,960
Materials	4,750

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		$269,630
b.	Materials requisitioned for use:
		PhosphateMaking Department	$178,110
		PackagingPacking Department	61,950
		Indirect materialsMaking Department	6,970
		Indirect materialsPacking Department	2,500
c.	Labor used:
		Direct laborMaking Department	$127,250
		Direct laborPacking Department	85,890
		Indirect laborMaking Department	24,640
		Indirect laborPacking Department	44,180
d.	Depreciation charged on fixed assets:
		Making Department	$23,230
		Packing Department	19,180
e.	Expired prepaid factory insurance:
		Making Department	$4,400
		Packing Department	1,760
f.	Applied factory overhead:
		Making Department	$60,720
		Packing Department	67,090
g.	Production costs transferred from Making Department to Packing Department		$367,140
h.	Production costs transferred from Packing Department to Finished Goods		$577,810
i.	Cost of goods sold during the period		$579,920

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.

Factory OverheadMaking Department	$	Credit
Factory OverheadPacking Department	$	Debit