Major League Bat Company manufactures baseball bats. In addition to its work in process inventories, the company maintains inventories of raw materials and finished goods. It uses raw materials as direct materials in production and as indirect materials. Its factory payroll costs include direct labor for production and indirect labor. All materials are added at the beginning of the process, and conversion costs are applied uniformly throughout the production process.

Required:

You are to maintain records and produce measures of inventories to reflect the July events of this company. The June 30 balances: Raw Materials Inventory, $25,000; Work in Process Inventory, $8,135 ($2,660 of direct materials and $5,475 of conversion); Finished Goods Inventory, $110,000; Sales, $0; Cost of Goods Sold, $0; Factory Wages Payable, $0; and Factory Overhead, $0. 1. Prepare journal entries to record the following July transactions and events.

1. Purchased raw materials for $125,000 cash.
2. Used raw materials as follows: direct materials, $52,440, and indirect materials, $10,000.
3. Recorded factory wages payable costs as follows: direct labor, $202,250, and indirect labor, $25,000.
4. Incurred other actual factory overhead costs of $66,125 paid in cash.
5. Applied factory overhead to production at 50% of direct labor costs.

2. Information about the July work in process (WIP) inventory follows. Use this information with that from part 1 to prepare a production cost report, assuming the weighted average method is used.

Units
Beginning WIP inventory	5,000	units
Started	14,000	units
Units transferred out	11,000	units
Ending WIP inventory	8,000	units

Beginning WIP inventory
Direct materialsPercent complete	100%
ConversionPercent complete	75%

Ending WIP inventory
Direct materialsPercent complete	100%
ConversionPercent complete	40%

3. Using the results from part 2 and the available information, make computations and prepare journal entries to record the following:

6. Total costs transferred to finished goods for July.
7. Sale of finished goods costing $265,700 for $625,000 in cash.

4. Post entries from parts 1 and 3 to the following general ledger accounts. 5. Compute the amount of gross profit from the sales in July.

No Transaction Credit Debit 125.000 1 General Journal Raw materials inventory Cash a 125.000 22 b1 Work in process inventory Factory overhead Raw materials inventory 52.440 10,000 62.440 . 4 c1 Work in process inventory Factory overhead Factory wages payable 202.250 25.000 227.250 5 c2 227 250 Factory wages payable Cash 227.250 d 88000 Factory overhead Cash 88 000 7 e 101.125 Work in process inventory Factory overhead 101,125 Ches 5.000 14.000 19.000 Units to account for: Beginning work in process Units started this period Total units to account for Units accounted for Completed and transferred out Ending work in process Total units accounted for Equivalent units of production (EUP) 11,000 8.000 19.000 ok ces Units 11.000 8,000 19,000 Completed and transferred out Ending work in process Equivalent Units of Production Cost per equivalent unit of production Cost of beginning work in process Costs added this period Total costs - Equivalent units of production Cost per equivalent unit of production (rounded to 2 decimals) Direct Materials % Complete EUP 100% 11,000 100% 8,000 19.000 Direct Materials $ 2,660 52.440 Costs $ 55.100 19,000 $ 2.90 Conversion % Complete EUP 100% 11,000 40% 3.200 14200 Conversion $ 5.475 303.375 Costs $ 308.850 EUP 14 200 $ 21 75 EUP r3 Problem(s) of the Week Saved Help Save & Exit Subre Check my work 100% 40% 8000 19.000 8.000 19.000 3.200 14.200 Direct Materials $ Conversion $ $ Costs 2.660 52.440 55.100 19.000 2.90 $ Ending work in process Equivalent Units of Production Cost per equivalent unit of production Cost of beginning work in process Costs added this period Total costs - Equivalent units of production Cost per equivalent unit of production (rounded to 2 decimals) Cost Assignment Completed and transferred out Direct materials Conversion Costs EUP 5.475 303 375 308,850 14 200 21.75 ok EUP $ $ ces EUP Cost per EUP 11,000 $ 2.90 $ 11,000 5 21.75 Total cost 31.900 239 250 $ 271,150 Ending work in process Direct materials Conversion EUP Cost per EUP 8,000 $ 2.905 3,200 $ 21.75 Total cost 23.200 69,600 92.800 363,950 Total costs accounted for $ Using the results from part 2 and the available information, make computations and prepare journal entries to record the following: f. Total costs transferred to finished goods for July. 9. Sale of finished goods costing $265,700 for $625,000 in cash. Show less View transaction list View journal entry worksheet No Transaction General journal 1 Finished goods inventory Work in process Inventory Debit Credit 265,700 265,700 2 91 625.000 Cash Sales 625,000 92 265,700 Cost of goods sold Finished goods Inventory 265,700 Required 1 Required 2 Required 3 Required 4 Required 5 Post entries from parts 1 and 3 to the following general ledger accounts. Raw Materials Inventory Account Number 132 Work in Process Inventory Date Debit Credit Balance Date Debit Credit June 30 25,000 June 30 (a) 125.000 150.000 b) 52.440 (0) 62.440 87.560 (d) 202 250 () 101.125 19 265,700 Account Number 133 Balance 8,135 60.575 262,825 363.950 98,250 Finished Goods Inventory Debit Credit Date Date June 30 Credit Account Number 135 Balance 110,000 375,700 110.000 Factory Wages Payable Debit 271,150 Account Number 212 Balance (271.150) (5.450) 265,700 265,700 265.700 Prey 1 of 1 1: Next Cost of Goods Sold Date Sales Debit 265.700 Credit Account Number 413 Balance (265,700) Date Credit Debit 265,500 Account Number 502 Balance 265,500 Date Credit Factory Overhead Debit 10.000 25,000 80.000 Account Number 540 Balance 10,000 35,000 115,000 13.875 101.125