Cool Sun produces awnings and screens. Prepare journal entries to reflect the fo
ID: 2474689 • Letter: C
Question
Cool Sun produces awnings and screens. Prepare journal entries to reflect the following transactions. After you complete the entries, determine the amount to include in raw materials, work in process, and finished goods.
Aug. 4, 20X5 Purchased fabric and aluminum to be used in the manufacturing process. The purchase price was $4,000, on account.
Aug. 8, 20X5 Transferred 60% of the raw materials purchased on August 4 into production.
Aug. 8, 20X5 Incurred direct labor costs of $3,000. Factory overhead is applied at 40% of the direct labor cost.
Aug. 9, 20X5 Transferred completed awnings with total assigned costs of $4,400 to finished goods.
Aug. 10, 20X5 Sold and delivered half of the finished goods (from August 9) to a customer for $4,000 cash.
Explanation / Answer
Column1 Column2 Column3 Column4 Column5 Column6 Jouranl entries Date Account titles & explanations Debit Credit 4-Aug Raw materials inventory 4,000 To Accounts paybale 4,000 8-Aug WIP inventory 2400 To Raw materials inventory 2,400 8-Aug WIP inventory 3,000 To Facotry payroll 3,000 WIP inventory 1200 To Manufacturing overhead 1,200 9-Aug Finished goods inventory 4,400 To WIP inventory 4,400 10-Aug Accounts receivable 4,000 to Sales 4,000 Cost of goods sold 2,200 To Finished goods inventory 2,200 Raw materials total $4000 and balance 1,600 WIP total 6600 and balance at end 2,200 Finished goods total 4,400 and balance 2,200