Exercise 7-22 (Static) Assigning Costs to Jobs (LO 7-1, 2)

The following transactions occurred in April at Steves Cabinets, a custom cabinet firm.

1. Purchased $80,000 of materials on account.

2. Issued $4,000 of supplies from the materials inventory.

3. Purchased $56,000 of materials on account.

4. Paid for the materials purchased in transaction (1) using cash.

5. Issued $68,000 in direct materials to the production department.

6. Incurred direct labor costs of $100,000, which were credited to Wages Payable.

7. Paid $106,000 cash for utilities, power, equipment maintenance, and other miscellaneous items for the manufacturing plant.

8. Applied overhead on the basis of 125 percent of $100,000 direct labor costs.

9. Recognized depreciation on manufacturing property, plant, and equipment of $50,000.

The following balances appeared in the accounts of Steves Cabinets for April.

	Beginning			Ending
Materials Inventory	$	148,200			?
Work-in-Process Inventory		33,000			?
Finished Goods Inventory		166,000		$	143,200
Cost of Goods Sold					263,400

Required:

a. Prepare journal entries to record the transactions.

b. Prepare T-accounts to show the flow of costs during the period from Materials Inventory through Cost of Goods Sold.

Complete this question by entering your answers in the tabs below.

• Required A
• Required B

Prepare T-accounts to show the flow of costs during the period from Materials Inventory through Cost of Goods Sold.

Materials Inventory					Work-In-Process Inventory
Beg. bal.					Beg. bal.
								Finished Goods
End. bal.	0
					End. bal.	0
Manufacturing Overhead Control					Applied Manufacturing Overhead
Beg. bal.					Beg. bal.
					End. bal.	0
End. bal.	0
Accounts Payable					Cash
Beg. bal.					Beg. bal.
End. bal.	0				End. bal.	0
Wages Payable					Accumulated DepreciationProperty, Plant, and Equipment
Beg. bal.					Beg. bal.
End. bal.	0				End. bal.	0
Finished Goods Inventory					Cost of Goods Sold
Beg. bal.					Beg. bal.
Goods completed			Transfer to Cost of Goods Sold		Finished Goods Inventory
End. bal.	0				End. bal.	0

• Required A
• Required B