Question

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


June 1 balances in the subsidiary ledgers were as follows:
• Raw Materials Inventory subsidiary ledger: Paper, $ 4,300; indirect materials, $ 1,900
• Work-in-Process Inventory subsidiary ledger: Job 120, $ 43,000; Job 121, $ 0
• Finished Goods Inventory subsidiary ledger: Large Stars, $ 9,300; Small Stars, $ 12,000 June transactions are summarized as follows:
a. Collections on account, $ 155,000.
b. Selling and administrative expenses incurred and paid $ 22,000.
c. Payments on account, $ 37,000.
d. Materials purchases on account: Paper, $ 26,600; indirect materials, $ 4,200.
e. Materials requisitioned and used in production:
Job 120: Paper; $ 900
Job 121: Paper, $ 7,850
Indirect materials, $ 1,600
f. Wages incurred during June, $ 43,000. Labor time records for the month: Job 120, $ 4,800; Job 121: $ 18,500; indirect labor, $ 19,700.
g. Wages paid in June include the balance in Wages Payable at May 31 plus $ 39,900 of wages incurred during June.
h. Depreciation on plant and equipment, $ 2,700.
i. Manufacturing overhead allocated at the predetermined overhead allocation rate of 90% of direct labor cost.
j. Jobs completed during the month: Job 120, 600,000 Large Stars at a total cost of $ 53,020.
k. Sales on account: all of Job 120 for $ 133,000.
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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