Question

Required: Prepare journal entries dated June 30 to record the following production activities during June for the information below: (a) raw materials purchases, (b) direct materials usage, (c) indirect materials usage, (d) direct labor costs, (e) indirect labor costs, (f) payment of factory payroll, (g) other overhead costs, (h) overhead applied, (i) goods transferred from production to finished goods, and (i) sale of finished goods. Prepare the journal entries in excel using appropriate spacing, referencing, and formulas. Information: Dream Toys Company manufactures video game consoles and accounts for product costs using process costing. The company uses a single processing department. The following information is available regarding its June inventories. Raw materials inventory Work in process inventory Finished goods inventory Beginning Inventory $ 72,000 156,000 160,000 Ending Inventory $110,000 250,000 198,000 The following additional information describes the company's production activities for June. $ 200,000 400,000 170,500 $ Raw materials purchases (on credit) Factory payroll cost (paid in cash) Other overhead cost (Other Accounts credited) Materials used Direct Indirect Labor used Direct Indirect Overhead rate as a percent of direct labor Sales (on credit) 120,000 42,000 $ 350,000 50,000 75% $1,000,000

Answer 1

Journal entries debit credit particulay 2) Purchase of raw material 2,00,000 Stores Ledger control al - Dr To cost Ledger control alc 2,00,000 2) direct material usage work In Progress control al-Dr/ 1920000 To stores Ledger Control ale Copening stock + Purchases-closing stock [72000 + 200000 - 110000] 162oooo 3) Indirect material usage control al-Dor 42000 factory overhead 42000 To stores ledger controlak

particulars debit credit 350000 50,ooo 7 direct labour work In Progrey controlake - De 350000 To cost ledger control ale 5 Indirect labour factory over head controlale-Dr 50000 To cost Ledger control ale 6) payment of factory payroll factory overhead control alc-Dr 4,00000 To cost Ledger Control al 7 other overhead cost other over head control al-Dr 170500 To cost Ledger control al 8) factor overhead Epother overhead absorbed work In Progress controlalc-Dr 662500 To factroy overhead controlale To other overhead controlale 4, 09000 1705oo 492000 1 2000+50000 + 1,00000) 170500

debit credit porticulars 1038500 finished goods control alco Dr 1038500 To work In Progress ale [opening work In Progress direct materia + direct labour factory overhead- closing work In Progress] [156000 4.120000 + 350000+662500 - 260000] sale of finished goods. cost Ledger control alc-Dr 100oooo! To sales (ºooooo