Q$2.$

Mighty Stars produces stars for elementary teachers to reward their students Mighty Stars$$ trial balance on June $1$ follows:

June $1$ balances in the subsidiary ledgers were as follows:

$$ Raw Materials Inventory subsidiary ledger: Paper, $$4,000$; indirect materials, $$2,000$

$$ Work$-$in$-$Process Inventory subsidiary ledger: Job $120,$ $$40,000$; Job $121,$ $$0$ June transactions are summarized as follows:

a$.$ Collections on account, $$145,000.$

b$.$ Selling and administrative expenses incurred and paid, $$32,000.$

c$.$ Payments on account, $$39,000.$

d$.$ Materials purchases on account: Paper, $$24,000$; indirect materials, $$4,200.$

e$.$ Materials requisitioned and used in production:

f$.$ Wages incurred during June, $$39,000.$ Labor time records for the month: Job $120,$ $$3,600$; Job $121,$

$$17,000$; indirect labor, $$18,400.$

g$.$ Wages paid in June include the balance in Wages Payable at May $31$ plus $$36,100$ of wages incurred during June.

h$.$ Depreciation on plant and equipment, $$2,500.$

i$.$ Manufacturing overhead allocated at the predetermined overhead allocation rate of $8\%$ of direct labor costs.

j$.$ jobs completed during the month: job $120$ with $700,000$ Large Stars at a total cost of $$47,430.$

k$.$ Sales on account: all of Job $120$ for $$104,000.$

l$.$ Adjusted for overallocated or under allocated manufacturing overhead. Requirements

$1.$ Use the Work$-$in$-$Process Inventory T$-$account to prepare a schedule of cost of goods manufactured for the month of June.

$2.$ Prepare an income statement for the month of June.

FINANCIAL ACCOUNTING

$10$th Edition Author: Libby