Question

On April 1, Telecom Manufacturing Company's beginning balances in manufacturing accounts and finished goods inventory were as follows: Raw Materials $16,000 Manufacturing Supplies 1,500 Work-in-Process 6,500 Manufacturing Overhead 0 Finished Goods 30,000 During April, Telecom Manufacturing completed the following manufacturing transactions: 1. Purchased raw materials costing $47,000 and manufacturing supplies costing $3,000 on account. (Single Transaction) 2. Requisitioned raw materials costing $45,000 to the factory. 3. Incurred direct labor costs of $27,000 and indirect labor costs of $4,800. 4. Used manufacturing supplies costing $2,500. 5. Recorded manufacturing depreciation of $15,000. 6. Miscellaneous payables for manufacturing overhead totaled $3,600. 7. Applied manufacturing overhead, based on 2,250 machine hours, at a predetermined rate of $10 per machine hour. 8. Completed jobs costing $90,000. 9. Finished goods costing $100,000 were sold.

(a) Prepare "T" accounts showing the flow of costs through all manufacturing accounts, Finished Goods Inventory, and Cost of Goods Sold.
(b) Calculate the balances at the end of April for Work-in-Process Inventory and Finished Goods Inventory.Enter transactions in the T-accounts in the order they appear using the first available answer box on the appropriate side.

Answer 1

Raw Materials

Debit Credit

16,000

#1 Purchase 47,000

#2 requisitions 45,000

Ending 18,000

Manufacturing Supplies

Debit Credit

1,500

#1 Purchase 3,000

#4 Used 2,500

Ending 2,000

WIP - Inventory

Debit Credit

6,500

#2 Direct M 45,000

#3 Direct L 27,000

#7 Applied MO 22,500

#Complete Jobs 90,000

Ending 11,000

Manufacturing Overhead

Debit Credit

0

#3 Indirect L 4,800

#4 Indirect M 2,500

#5 depreciation 15,000

#6 Miscellaneous 3,600

#7 Applied 22,500

Ending 3,400

Adjustment

for underapplied 3,400

Balance 0

Finished Goods

Debit Credit

30,000

#8 Completed 90,000

#9 Sold 100,000

Ending 20,000

Cost of Good Sold

Debit Credit

#9 Sold 100,000

Adjustment

for underapplied MO 3,400

ending 103,400

(b)

WIP Ending Balances 11,000

Finished Goods 20,000

Step-by-step explanation:

The origin of the cost is displatyed on the credit whilethe destination in the dbeit

For example:

when we complete a job we credit work in process inventory (origin) and debit finished good (destination of the cost)

when we transfer the requisitioned materials we credit raw materials (origin) and debit WIP-inventory (destination)