Question

Forest Components makes aircraft parts. The following transactions occurred in July. 1. Purchased $16,810 of materials on account. 2. Issued $16,720 in direct materials to the production department. 3. Issued $1,310 of supplies from the materials inventory. 4. Paid for the materials purchased in transaction (1) using cash. 5. Returned $2,200 of the materials issued to production in (2) to the materials inventory. 6. Direct labor employees earned $31,900, which was paid in cash. 7. Purchased miscellaneous items for the manufacturing plant for $17,210 on account. 8. Recognized depreciation on manufacturing plant of $36,600. 9. Applied manufacturing overhead for the month. Forest uses normal costing. It applies overhead on the basis of direct labor costs using an annual, predetermined rate. At the beginning of the year, management estimated that direct labor costs for the year would be $434,100. Estimated overhead for the year was $429,759 The following balances appeared in the inventory accounts of Forest Components for July. Materials Inventory Work-in-Process Inventory Finished Goods Inventory Cost of Goods Sold Beginning Ending ? $12,590 ? 10,530 $ 2,620 6,900 ? 74,500 Required: a. Prepare journal entries to record these transactions. b. Prepare T-accounts to show the flow of costs during the period from Materials Inventory through cost of Goods Sold.

Answer 1

TR	General journal	Debit	Credit
1)	Raw materials inventory	$16,810
	Accounts payable		$16,810
2)	Work in process inventory	$16,720
	Raw materials inventory		$16,720
3)	manufacturing overhead	$ 1,310
	Raw materials inventory		$ 1,310
4)	Accounts payable	$16,810
	cash		$16,810
5)	Raw materials inventory	$ 2,200
	work in process inventory		$ 2,200
6)	work in process inventory	$31,900
	cash		$31,900
7)	manufacturing overhead	$17,210
	Accounts payable		$17,210
8)	Manufacturing overhead	$36,600
	Accumulated depreciation		$36,600
9)	work in process inventory	$31,581
	applied Manufacturing overhead		$31,581
	(31,900*99%)

Materials inventory					Work in process inventory
Beg.Bal	$11,610				beg .bal	$11,309
1)	$16,810	$16,720	2)		2)	$16,720	$ 2,200	5)
5)	$ 2,200	$ 1,310	3)		6)	$31,900	$78,780	Trfd to finished
					9)	$31,581		goods
end bal	$12,590				End bal	$10,530
Manufacturing overhead control					Applied manufacturing overhead
Beg.bal	$        -				Beg.Bal		$        -
3)	$ 1,310						$31,581	9)
7)	$17,210
8)	$36,600
End bal	$55,120				end bal		$31,020
Accounts payable					Cash
Beg.Bal		$        -			Beg.Bal	$        -
4)	$16,810	$16,810	1)				$16,810	4)
		$17,210	7)				$31,900	6)
End bal		$17,210			End bal		$48,710
Accumulated Depreciation -PP&E					finished goods inventory
Beg.bal		$        -			Beg bal	$ 2,620
		$36,600	8)		goods com	$78,780	$74,500	Trfd to COGS
End bal		$36,600			end bal	$ 6,900
cost of goods sold
Beg.Bal	$        -
Goods comp	$74,500
End bal	$74,500