The records of Fremont Corporations initial and unaudited accounts show the following ending inventory balances, which must be adjusted to actual costs.

	Units	Unaudited Costs
Work-in-process inventory	190,000	$	812,122
Finished goods inventory	21,000		358,700

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
	Units	Direct Materials			Direct Labor
Beginning inventory (80% complete as to labor)	88,000	$	686,400		$	848,000
Units started	540,000
Current costs			1,700,000			2,236,000
Units completed and transferred to finished goods inventory	438,000

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.) (Round "Cost per equivalent unit" to 2 decimal places.)

FREMONT CORPORATION Production Cost Report- Weighted- Average

Flow of Production Units	Physical Units
Units to be accounted for
Beginning WIP inventory	??
Units started this period	??
Total units to be accounted for	??

Compute Equivalent Units

		Materials	Labor	Overhead
Units accounted for:
Units completed and transferred out
From beginning inventory	??
Started and completed currently	??
Transferred Out	??	??	??	??
Units in ending WIP inventory	??	??	??	??
Total Units accounted for

DETAILS

	Total Costs	Materials	Labor	Overhead
Costs to be accounted for:
Costs in beginning WIP inventory	??	??	??	??
Current Period costs	??	??	??	??
Total costs to be accounted for	$	$	$	$
Cost per equivalent unit:
Materials		??
Labor			??
Overhead				??
Costs accounted for:
Costs assigned to units transferred out:
Materials	??	??
Labor	??		??
Overhead	??			??
Total costs of units transferred out:	$$
Costs assigned to ending WIP inventory:
Materials	??	??
Labor	??		??
Overhead	??			??
Total ending WIP inventory	$$
Total Costs accounted for	$$	$$	$$	$$

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. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

** Record the difference between the unaudited and actual ending balances of Work-In-Process Inventory and Finished Goods Inventory

Event	General Journal	Debit	Credit
1

c. If the adjustment in requirement (b) is not made, will the companys income and inventories be overstated or understated?

Income would have been
Working in process would have been
Finished goods would have been