Question

Record the following process costing transactions in the general journal:

a. Purchase of raw materials on account, $9, 300
b. Requisition of direct materials to Assembly Department, $4, 300 Finishing Department, $2, 400
c. Incurrence and payment of direct labor, $10, 500 (these costs should be debited to WIP Inventory-Assembly)
d. Incurrence of manufacturing overhead costs (unpaid): Property taxes-plant, $1, 800 Utilities-plant, $4, 800 Insurance-plant, $1, 700 Depreciation-plant, $3, 800
e. Assignment of conversion costs to the Assembly Department: Direct labor, $5, 000 Manufacturing overhead, $2, 600
f. Assignment of conversion costs to the Finishing Department: Direct labor, $4, 700 Manufacturing overhead, $6, 600
g. Cost of goods completed and transferred out of the Assembly Department to the Finishing Department, $10, 500
h. Cost of goods completed and transferred out of the Finishing Department into Finished Goods Inventory, $15, 600

Answer 1

a.

Raw Materials $9,300 (debit)

Account Payable $9,300 (credit)

b.

Assembly Department $4,300 (debit)

Finishing Department $2,400 (debit)

Raw Materials $6,700 (credit)

c.

WIP Inventory-Assembly $10,500 (debit)

Cash $10,500 (credit)

d.

Overheads $12,100 (debit)

Property taxes-plant: Payable $1, 800 (credit)

Utilities-plant : Payable $4, 800 (credit)

Insurance-plant : Payable, $1, 700 (credit)

Provision for Depreciation-plant, $3, 800 (credit)

e.

Work In Process - Assembly Department $7,600 (debit)

Direct labor, $5, 000 (credit)

Manufacturing overhead, $2, 600 (credit)

f.

Work In Process - Finishing Department $11,300 (debit)

Direct labor, $4,700 (credit)

Manufacturing overhead, $6,600 (credit)

g.

Finishing Department, $10,500 (debit)

Assembly Department $10,500 (credit)

h.

Finished Goods Inventory $15,600 (debit)

Finishing Department $15,600 (credit)

Step-by-step explanation:

Manufacturing costs accumulate in the Work In Process Account of their respective departments.

When goods are transferred out of the Assembly Department to the Finishing Department, de-recognize the cost from Assembly Department (credit) and recognized the cost in Finishing Department (debit).

When cost of goods completed are transferred out of the Finishing Department into Finished Goods Inventory, we de-recognize the cost from Finishing Department and recognize it in the Finished Goods Inventory.