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Sunset Products manufactures skateboards. The following transactions occurred in March. Purchased $27,000 of materials on account. Issued $1,700 of supplies from the materials inventory. Purchased
Sunset Products manufactures skateboards. The following transactions occurred in March.
- Purchased $27,000 of materials on account.
- Issued $1,700 of supplies from the materials inventory.
- Purchased $26,400 of materials on account.
- Paid for the materials purchased in transaction (1) using cash.
- Issued $31,400 in direct materials to the production department.
- Incurred direct labor costs of $32,000, which were credited to Wages Payable.
- Paid $22,900 cash for utilities, power, equipment maintenance, and other miscellaneous items for the manufacturing shop.
- Applied overhead on the basis of 110 percent of direct labor costs.
- Recognized depreciation on manufacturing property, plant, and equipment of $6,400.
The following balances appeared in the accounts of Sunset Products for March.
BeginningEndingMaterials Inventory$11,100?Work-in-Process Inventory17,900?Finished Goods Inventory66,400$37,900Cost of Goods Sold74,400
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.
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