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	$25,220
Work in ProcessMaking	9,800
Work in ProcessPacking	12,770
Materials	5,540

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		$314,060
b.	Materials requisitioned for use:
		PhosphateMaking Department	$207,460
		PackagingPacking Department	72,160
		Indirect materialsMaking Department	8,120
		Indirect materialsPacking Department	2,910
c.	Labor used:
		Direct laborMaking Department	$148,220
		Direct laborPacking Department	100,040
		Indirect laborMaking Department	28,700
		Indirect laborPacking Department	51,460
d.	Depreciation charged on fixed assets:
		Making Department	$27,060
		Packing Department	22,350
e.	Expired prepaid factory insurance:
		Making Department	$5,130
		Packing Department	2,050
f.	Applied factory overhead:
		Making Department	$70,730
		Packing Department	78,150
g.	Production costs transferred from Making Department to Packing Department		$427,630
h.	Production costs transferred from Packing Department to Finished Goods		$673,020
i.	Cost of goods sold during the period		$675,480

Required:

1. Journalize the entries to record the operations, identifying each entry by letter. If an amount box does not require an entry, leave it blank.

Item Account Debit Credit a. Materials 0 Accounts Payable b. O 0 Work in Process-Making Department v Work in Process-Packing Department Factory Overhead-Making Department Factory Overhead-Packing Department v Materials 0 0 c. 0 Work in Process-Making Department v Work in Process-Packing Department Factory Overhead-Making Department Factory Overhead-Packing Department v Wages Payable 0 0 d. 0 Factory Overhead-Making Department v Factory Overhead-Packing Department Accumulated Depreciation V 0 0 e. 0 Factory Overhead-Making Department v Factory Overhead-Packing Department v Prepaid Insurance 0 f. 0 0 Work in Process-Making Department Work in Process-Packing Department Factory Overhead-Making Department Factory Overhead-Packing Department v 0 g. 0 Work in Process-Packing Department Work in Process-Making Department g. 0 Work in Process-Packing Department Work in Process-Making Department 0 h. Finished Goods Work in Process-Packing Department 0 i. Cost of Goods Sold 0 Finished Goods 0 2. Compute the July 31 balances of the inventory accounts. Materials Work in Process-Making Department Work in Process-Packing 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. Credit Factory Overhead-Making Department Factory Overhead-Packing Department $ Debit