Question

Major League Bat Company manufactures baseball bats. In addition to its work in process Inventories, the company maintains inventories of raw materials and finished goods. It uses raw materials as direct materials in production and as Indirect materials. Its factory payroll costs include direct labor for production and Indirect labor. All materials are added at the beginning of the process, and conversion costs are applied uniformly throughout the production process. Requlred: You are to maintaln records and produce measures of Inventories to reflect the July events of this company. The June 30 balances: Raw Materials Inventory, $25,000; Work In Process Inventory, $8,135 ($2,660 of direct materials and S5,475 of conversion); Finlshed Goods Inventory, $110.,000: Sales, $0: Cost of Goods Sold, $0: Factory Payroll Payable, so: and Factory Overhead, $0 1. Prepare journal entries to record the following July transactions and events Skipped a. Purchased raw materials for $125,000 cash (the company uses a perpetual inventory system). b. Used raw materials as follows: direct materials, $52,440; and Indirect materials, $10,000 c. Recorded factory payroll payable costs as follows: direct labor, $202,250; and Indirect labor, $25,000 d. Paid factory payroll cost of $227,250 with cash (ignore taxes). e. Incurred additional factory overhead costs of $80,000 pald in cash. Allocated factory overhead to production at 50% of direct labor costs.

Answer 1

To reflect the July events of Major League Bat Company, journal entries need to be prepared for various transactions such as purchasing raw materials, using raw materials, recording payroll costs, paying factory payroll, incurring factory overhead costs, and allocating factory overhead. These journal entries will update the inventory balances.

Step-by-step explanation:

To reflect the July events of Major League Bat Company, we need to prepare journal entries for the following transactions:

1. Purchased raw materials for $125,000 cash
2. Used raw materials for direct materials ($52,440) and indirect materials ($10,000)
3. Recorded factory payroll payable costs for direct labor ($202,250) and indirect labor ($25,000)
4. Paid factory payroll cost of $227,250 with cash
5. Incurred additional factory overhead costs of $80,000 paid in cash
6. Allocated factory overhead to production at 50% of direct labor costs

These transactions should be recorded in the appropriate accounts to update the inventory balances.