1. Speedy uses backflush costing to account for its manufacturing costs. The trigger points for recording inventory transactions are the purchase of materials, the completion of products, and the sale of completed products. The 

following transactions occurred during the period.

 

a.Purchased raw materials on account, P75,000.

b.Requisitioned raw materials to production, P75,000

c.Distributed direct labor costs, P12,500

d.Incurred manufacturing overhead costs, P50,000.

e.Cost of products completed, P137,500

f.Completed products sold for P200,000 on account

Required:

Prepare the necessary journal entries to record the above transactions.

2. The Smile Manufacturing Company uses a Raw and In process account and charges all conversion cost to Cost of Goods sold. At the end of each month, all inventories are counted, their conversion cost components are 

estimated and inventory account balances are adjusted. Raw Materials cost is backflushed from RIP to Finished Goods. The following is for the month of September

 

RIP beginning, including P2,000 of conversion costP20,000

FG beginning, including P1,200 of conversion cost12,000

Raw Materials purchased on credit 200,000

RIP end, including P3,000 of conversion cost30,000

FG end, including P2,300 of conversion cost23,000

Conversion cost - P130,000 of direct labor and P260,000 of overhead

Requirements:

1.Amount of materials backflushed from RIP to Finished Goods

2. Amount of materials backflushed from Finished Goods to Cost of Goods Sold

3. Journal entries to record the given transactions.

Answer rating: 100% (QA)

1 Journal Entries for Speedy a Purchased raw materials on account P75000 Debit Raw Materials Inventory 75000 Credit Accounts Payable 75000 b Requisiti... View the full answer