Question

The cost of materials transferred into the Rolling Department of Keystone Steel Company is $571,100 from the Casting Department. The conversion cost for the period in the Rolling Department is $111,000 ($68,000 factory overhead applied and $43,000 direct labor). The total cost transferred to Finished Goods for the period was $669,000. The Rolling Department had a beginning inventory of $26,800.

Required:

a. On June 30, journalize the cost of transferred-in materials.
b. On June 30, journalize the conversion costs.
c. On June 30, journalize the costs transferred out to Finished Goods.

Answer 1

Part a

Debit : Work in Process : Casting Department $571,100

Credit : Work In Process : Rolling Department $571,100

Being Cost of materials transferred from Casting Department to Rolling Department

Part b

Debit : Work In Process : Overheads $68,000

Debit : Work In Process : Direct Labor $43,000

Credit : Overheads $68,000

Credit : Salaries Payable $43,000

Being factory overhead applied and direct labor incurred

Part c

Debit : Finished Goods Inventory $669,000

Credit : Work in Process : Rolling Department $669,000

Being Cost transferred to Finished Goods for the period

Step-by-step explanation:

Journal entries for the transactions have been prepared above.