Question

Howie Stars produces stars for elementary teachers to reward their students. Howie Stars’ trial balance on June 1 follows:


June 1 balances in the subsidiary ledgers were as follows:
• Raw Materials Inventory subsidiary ledger: Paper, $ 4,700; indirect materials, $ 1,000
• Work-in-Process Inventory subsidiary ledger: Job 120, $ 39,400; Job 121, $ 0
• Finished Goods Inventory subsidiary ledger: Large Stars, $ 9,400; Small Stars, $ 11,000
June 1 balances in the subsidiary ledgers were as follows:
• Raw Materials Inventory subsidiary ledger: Paper, $ 4,700; indirect materials, $ 1,000
• Work-in-Process Inventory subsidiary ledger: Job 120, $ 39,400; Job 121, $ 0
• Finished Goods Inventory subsidiary ledger: Large Stars, $ 9,400; Small Stars, $ 11,000
June transactions are summarized as follows:
a. Collections on account, $ 152,000.
b. Selling and administrative expenses incurred and paid, $ 28,000.
c. Payments on account, $ 36,000.
d. Materials purchases on account: Paper, $ 22,900; indirect materials, $ 3,800.
e. Materials requisitioned and used in production: Job 120:
Paper; $ 850 Job 121:
Paper, $ 7,650
Indirect materials, $ 1,000
f. Wages incurred during June, $ 35,000. Labor time records for the month: Job 120, $ 3,500; Job 121: $ 16,600; indirect labor, $ 14,900.
g. Wages paid in June include the balance in Wages Payable at May 31 plus $ 32,200 of wages incurred during June.
h. Depreciation on plant and equipment, $ 2,600.
i. Manufacturing overhead allocated at the predetermined overhead allocation rate of 50% of direct labor cost.
j. Jobs completed during the month: Job 120, 300,000 Large Stars at a total cost of $ 45,500.
k. Sales on account: all of Job 120 for $ 111,000.
l. Adjusted for overallocated or underallocated manufacturing overhead.

Requirements
1. Journalize the transactions for the company.
2. Open T-accounts for the general ledger, the Raw Materials Inventory subsidiary ledger, the Work-in-Process Inventory subsidiary ledger, and the Finished Goods Inventory subsidiary ledger. Insert each account balance as given, and use the reference Bal. Post the journal entries to the T-accounts using the trans-action letters as a reference.
3. Prepare a trial balance at June 30, 2014.
4. Use the Work-in-Process Inventory T-account to prepare a schedule of cost of goods manufactured for the month of June.
5. Prepare an income statement for the month ofJune.


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  • CreatedJanuary 16, 2015
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