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16 January, 23:18

Zang Co. manufacturs its products in a continuous process involving two departments, Machining and Assembly. The following transactions are related to production during June:

(a) Materials purchased (on June 1) on account, $180,000.

(b) Materials requisitioned by: Machining, $73,000 direct and $9,000 indirect materials; Assembly, $4,900 indirect materials.

(c) Direct labor used by Machining, $23,000; Assembly, $47,000.

(d) Depreciation expenses: Machining, $4,500; Assembly, $7,800.

(e) Factory overhead applied: Machining, $9,700; Assembly, $11,300.

(f) Machining Department transferred $98,300 to Assembly Department; Assembly Department transferred $83,400 to finished goods.

(g) Sold goods on account, $100,000; cost of goods sold, $68,000.

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Answers (1)
  1. 17 January, 03:10
    0
    Answer and Explanation:

    The Journal entry is shown below:-

    1. Material Inventory Dr, $180,000

    To Accounts Payable $180,000

    (Being Material Purchased on account is recorded)

    2. WIP Machining Dept. Dr, $73,000

    Manufacturing Overheads Machining Dept. Dr, $9,000

    Manufacturing Overheads Assembly Dept. Dr, $4,900

    To Material Inventory $86,900

    (Being Material issued to departments is recorded)

    3. WIP Machining Dept. Dr, $23,000

    WIP Assembly Dept. Dr, $47,000

    To Wages Payable $70,000

    (Being Direct Labor used is recorded)

    4. Manufacturing Overheads Machining Dept. Dr, $4,500

    Manufacturing Overheads Assembly Dept. Dr, $7,800

    To Depreciation Expense $12,300

    (Being Depreciation allocated is recorded)

    5. WIP Machining Dept. Dr, $9,700

    WIP Assembly Dept. Dr, $11,300

    To Man. Overheads Machining Dept. $9,700

    To Man. Overheads Assembly Dept. $11,300

    (Being Factory overheads applied is recorded)

    6. WIP Assembly Dept. Dr, $98,300

    To WIP Machining Dept. $98,300

    (Being WIP Transferred is recorded)

    7. Finished Goods Inventory Dr, $83,400

    To WIP Assembly Dept. $83,400

    (Being Finished goods transferred is recorded)

    8. Accounts Receivables Dr, $100,000

    To Sales $100,000

    (Being Goods sold on account is recorded)

    9. Cost of Goods sold Dr, $68,000

    To Finished Goods Inventory $68,000

    (Being Goods sold is recorded)
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