Question

20-07

Process Cost Journal Entries

The cost of materials transferred into the Rolling Department of Keystone Steel Company is $565,900 from the Casting Department. The conversion cost for the period in the Rolling Department is $109,900 ($65,400 factory overhead applied and $44,500 direct labor). The total cost transferred to Finished Goods for the period was $698,000. The Rolling Department had a beginning inventory of $25,000.

a1. Journalize the cost of transferred-in materials.

a2. Journalize the conversion costs. If an amount box does not require an entry, leave it blank.

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Remember there are three classifications of inventory, raw materials, work in process, and finished goods.

a3. Journalize the costs transferred out to Finished Goods.

b. Determine the balance of Work in Process—Rolling at the end of the period.
$

Answer 1

Ans-Journal Entries

Date	Account Title and Explanation	Debit ($)	Credit ($)
a 1.	Work in process- Rolling	565,900
	Work in process- Casting		565,900
a 2.	Work in process- Rolling	109,900
	Factory overhead-Rolling		65,400
	Wages payable		44,500
a 3.	Finished goods	698,000
	Work in process-Rolling		698,000
b	Work in process
	$25,000+$565,900+$109,900-$698,000= $2,800