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Hepworth Company has implemented a JIT system and is considering the use of backflush costing. Hepworth had the following transactions for the current fiscal year: 1. Purchased raw materials on account for $590,000. 2. Placed all materials received into production. 3. Incurred actual direct labor costs of $88,500. 4. Incurred actual overhead costs of $614,600. 5. Applied conversion costs of $663,800. 6. Completed all work for the month. 7. Sold all completed work. 8. Computed the difference between actual and applied costs. Required: 1. Prepare the journal entries for traditional costing. 1. Accounts Payable Accounts Receivable Cash Cost of Goods Sold Finished Goods Inventory Materials Inventory Overhead Control Wages Payable Work-in-Process Inventory Accounts Payable Accounts Receivable Cost of Goods Sold Finished Goods Inventory Materials Inventory Overhead Control Wages Payable Work-in-Process Inventory 2. Accounts Payable Accounts Receivable Cash Cost of Goods Sold Finished Goods Inventory Materials Inventory Overhead Control Wages Payable Work-in-Process Inventory Accounts Payable Accounts Receivable Cost of Goods Sold Finished Goods Inventory Materials Inventory Overhead Control Wages Payable Work-in-Process Inventory 3. Accounts Payable Accounts Receivable Cash Cost of Goods Sold Finished Goods Inventory Materials Inventory Overhead Control Wages Payable Work-in-Process Inventory Accounts Payable Accounts Receivable Cost of Goods Sold Finished Goods Inventory Materials Inventory Overhead Control Wages Payable Work-in-Process Inventory 4. Accounts Payable Accounts Receivable Cash Cost of Goods Sold Finished Goods Inventory Materials Inventory Overhead Control Wages Payable Work-in-Process Inventory Accounts Payable Accounts Receivable Cost of Goods Sold Finished Goods Inventory Materials Inventory Overhead Control Wages Payable Work-in-Process Inventory 5. Accounts Payable Accounts Receivable Cash Cost of Goods Sold Finished Goods Inventory Materials Inventory Overhead Control Wages Payable Work-in-Process Inventory Accounts Payable Accounts Receivable Cost of Goods Sold Finished Goods Inventory Materials Inventory Overhead Control Wages Payable Work-in-Process Inventory 6. Accounts Payable Accounts Receivable Cash Cost of Goods Sold Finished Goods Inventory Materials Inventory Overhead Control Wages Payable Work-in-Process Inventory Accounts Payable Accounts Receivable Cost of Goods Sold Finished Goods Inventory Materials Inventory Overhead Control Wages Payable Work-in-Process Inventory 7. Accounts Payable Accounts Receivable Cash Cost of Goods Sold Finished Goods Inventory Materials Inventory Overhead Control Wages Payable Work-in-Process Inventory Accounts Payable Accounts Receivable Cost of Goods Sold Finished Goods Inventory Materials Inventory Overhead Control Wages Payable Work-in-Process Inventory 8. Accounts Payable Accounts Receivable Cash Cost of Goods Sold Finished Goods Inventory Materials Inventory Overhead Control Wages Payable Work-in-Process Inventory Accounts Payable Accounts Receivable Cost of Goods Sold Finished Goods Inventory Materials Inventory Overhead Control Wages Payable Work-in-Process Inventory Prepare the journal entries for backflush costing. Assume there are two trigger points: (1) the purchase of raw materials and (2) the completion of the goods. If no entry is required, select "No entry required" and leave the amount boxes blank or enter "0". For a compound transaction, if an amount box does not require an entry, leave it blank. 1. 2. 3 & 4. 5. I l III I III I I I III III I I 6. 7. 8. Accounts Payable Conversion Cost Control Cost of Goods Sold No entry required Raw Materials and In Process Inventory Accounts Payable Conversion Cost Control Cost of Goods Sold Finished Goods Inventory No entry required Accounts Payable Conversion Cost Control Cost of Goods Sold Finished Goods Inventory No entry required Accounts Payable Conversion Cost Control Cost of Goods Sold Finished Goods Inventory No entry required Accounts Payable Cash Conversion Cost Control Cost of Goods Sold No entry required Conversion Cost Control No entry required Wages Payable Accounts Payable Conversion Cost Control Cost of Goods Sold Finished Goods Inventory No entry required Accounts Payable Conversion Cost Control Cost of Goods Sold Finished Goods Inventory No entry required Accounts Payable Conversion Cost Control Cost of Goods Sold Finished Goods Inventory No entry required Accounts Payable Conversion Cost Control Cost of Goods Sold Finished Goods Inventory No entry required Accounts Payable Cost of Goods Sold No entry required Raw Materials and In Process Inventory Accounts Payable Cash Conversion Cost Control Finished Goods Inventory No entry required Accounts Payable Conversion Cost Control Cost of Goods Sold Finished Goods Inventory No entry required Accounts Payable Conversion Cost Control Cost of Goods Sold Finished Goods Inventory No entry required Accounts Payable Conversion Cost Control Cost of Goods Sold Finished Goods Inventory No entry required Accounts Payable Conversion Cost Control Cost of Goods Sold Finished Goods Inventory No entry required 2. Assume the second trigger point in Requirement 1 is the sale of goods. If an amount box does not require an entry, leave it blank. What would change for the backflush-costing journal entries? with the following entry. Conversion Cost Control Cost of Goods Sold Raw Materials and In Process Inventory Accounts Payable Cash Cost of Goods Sold Finished Goods Inventory Raw Materials and In Process Inventory Accounts Payable Cash Conversion Cost Control Cost of Goods Sold Finished Goods Inventory Entries 6 and 7 are replaced in reg 1. No entry for transaction 1, transaction 6 is replaced in reg 1. No entry for transaction 1, transaction 7 is replaced in req. 1. 3. Assume there is only one trigger point and it is (a) completion of the goods or (b) sale of goods. If an amount box does not require an entry, leave it blank. How would the backflush costing journal entries differ from Requirement 1 for (a)? with the following entry. How would the backflush costing journal entries differ from Requirement 1 for (b)? If an amount box does not require an entry, leave it blank. lll with the following entry. Accounts Payable Cash Conversion Cost Control Finished Goods Inventory Accounts Payable Finished Goods Inventory Raw Materials and In Process Inventory Wages Payable Conversion Cost Control Finished Goods Inventory Raw Materials and In Process Inventory Wages Payable No entry for transaction 1, transaction 6 and 7 are replaced in req 1. No entry for transaction 1, transaction 6 is replaced in req 1. No entry for transaction 1 , transaction 7 is replaced in req. 1. Accounts Payable Conversion Cost Control Cost of Goods Sold Accounts Payable Finished Goods Inventory Raw Materials and In Process Inventory Wages Payable Conversion Cost Control Finished Goods Inventory Raw Materials and In Process Inventory Wages Payable No entry for transaction 1, transaction 6 and 7 are replaced in req 1. No entry for transaction 1, transaction 6 is replaced in reg 1. No entry for transaction 1, transaction 7 is replaced in req. 1
