Question

Beginning Inventories are: RM $1,000; WIP $2,500; FG $5,000 What are the journal entries for these inventory transactions? a. Purchased, on credit 10,000 lbs. of flour mix at $.50 per lb. b. Used 8,000 lbs. of flour in production c. A physical inventory of flour reveals an unaccountable shortage of 200 lbs. d. Added $4,000 of direct labor and applied $2,000 of manufacturing overhead to production. e. Completed production of $12,000 of finished goods. f. What are the balances in the Raw Material, WIP and Finished Goods?

Answer 1

Raw Materials

Opening Inventory $1,000

Purchases (10,000*0.5) 5,000

6,000

Transfer to production(WIP) (4,000)

(8000*0.5)

unaccountable shortage(200*0.5) (100)

Closing Balance of Inventory 1,900

WIP

opening Inventory $2,500

Raw material 4,000

Conversion cost:

Direct labor 4,000

Manufacturing overhead 2,000 6,000

12,500

Transfer to finished goods ( 12,000)

Closing Balance of Inventory 500

Finished Goods

Opening Invetory $5,000

Transfer from WIP 12,000

Closing Balance of Invetory 17,000

Step-by-step explanation: