The records of Fremont Corporation's initial and unaudited accounts show the following ending inventory balances, which must be adjusted to actual costs. Units Unaudited Costs Work-in-process inventory Finished goods inventory 175,000 21,000 $808,057 354, 170 As the auditor, you have learned the following information. Ending work-in-process inventory is 40 percent complete with respect to conversion costs. Materials are added at the beginning of the manufacturing process, and overhead is applied at the rate of 80 percent of the direct labor costs. There was no finished goods inventory at the start of the period. The following additional information is also available. Costs Direct Materials $501,750 Units Direct Labor $955,000 Beginning inventory (80% complete as to labor) Units started 85,000 510,000 Current costs 1,670,000 2,230,000 Units completed and transferred to finished goods inventory 420,000 Required: a. Prepare a production cost report for Fremont using the weighted-average method. (Hint: You will need to calculate equivalent units for three categories: materials, labor, and overhead.) b. Show the journal entry required to correct the difference between the unaudited records

The records of Fremont Corporation's initial and unaudited accounts show the following ending inventory balances, which must be adjusted to actual costs Work-in-process inventory Finished goods inventory Units 175,00 21,00 Unaudited Costs $808,057 354, 170 As the auditor, you have learned the following information Ending work in process inventory is 40 percent complete with respect to conversion costs. Materials are added at the beginning of the manufacturing process, and overhead is applied at the rate of 80 percent of the direct labor costs. There was no finished goods inventory at the start of the period. The following additional information is also available Costs Direct Materials Direct Labor $ 501.750 5 955.000 Beginning inventory (B0% complete as to labor) Units started Current costs Units completed and transferred to finished goods inventory Units 85,000 510,000 420,000 1,670,000 2,230,000 Required: a. Prepare a production cost report for Fremont using the weighted-average method. (Hint You will need to calculate equivalent units for three categories: materials, labor, and overhead) b. Show the journal entry required to correct the difference between the unaudited records and actual ending balances of Work-in- Process Inventory and Finished Goods Inventory. Debit or credit Cost of Goods Sold for any difference. c. If the adjustment in requirement (b) is not made, will the company's income and inventories be overstated or understated? 6 Required A Required B Required Prepare a production cost report for Fremont using the weighted average method. (Hint: You will need to calculate equivalent units three categories: materials, labor, and overhead.) (Round "Cost per equivalent unit" to 2 decimal places.) FREMONT CORPORATION Production Cost Report Weighted Average Physical Units Total Costs Materials Labor Overhead Flow of Production Units Units to be accounted for Beginning WIP inventory Units started this period Total units to be accounted for 85.000 510,000 595,000 Units accounted for Units completed and transferred out From beginning inventory Started and completed currently Total transferred out Units in ending WIP inventory Total units accounted for 0 0 0