Question
Sandy Cart Shop is a manufacturer of golf carts. Peter Cranston, the plant manager of Sandy Cart, obtains the following information for Job # 22
Sandy Cart Shop is a manufacturer of golf carts. Peter Cranston, the plant manager of Sandy Cart, obtains the following information for Job # 22 in August 2020. A total of 26 units were started, and 6 spoiled units were detected and rejected at final inspection, yielding 20 good units. The spoiled units were considered to be normal spoilage. Costs assigned prior to the inspection point are $1,350 per unit. The current disposal price of the spoiled units is $245 per unit. When the spoilage is detected, the spoiled goods are inventoried at $245 per unit. Required: Prepare the journal entries to record the normal spoilage, assuming the following: a. The spoilage is related to a specific job. b. The spoilage is common to all jobs. c. The spoilage is considered to be abnormal spoilage. (Record debits first, then credits. Exclude explanations from any journal entries.)
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