Parker Laboratories, Inc., produces one of its products in two successive departments. All materials are added...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Parker Laboratories, Inc., produces one of its products in two successive departments. All materials are added at the beginning of the process in Department 1; no materials are used in Department 2. Conversion costs are incurred evenly in both departments. August 1, 2019, inventory account balances are as follows: Materials inventory $15,000 Work in process- Department 1 (6,000 units, 25% finished) Direct materials 11,500 Conversion costs 18,750 Work in process - Department 2 (3,500 units, 35% finished) 41,000 Finished goods inventory (4,000 units @ $12.50) 50,000 During August, the following transactions occurred: 1. Purchased material on account, $58,000. 2. Placed $63,300 (16,000 units) of materials into process in Department 1. 3. Distributed total payroll costs: $83,770 of direct labor to Department 1, $42,300 of direct labor to Department 2, and $19,100 of indirect labor to Manufacturing Overhead. 4. Incurred other actual manufacturing overhead costs, $21,200. (Credit Other Accounts.) 5. Applied overhead to the two processing departments: Department 1, $21,080, Department 2, $17,900 6. Transferred 20,000 completed units from Department 1 to Department 2. The 2,000 units remaining in Department 1 were 30% completed with respect to conversion costs. 7. Transferred 15,000 completed units from Department 2 to Finished Goods Inventory. The 8,500 units remaining in Department 2 were 40% completed with respect to conversion costs. 8. Sold 13,000 units on account at $24 per unit. Parker uses weighted average inventory costing for finished goods inventory. a. Record the August transactions in general journal form for Department 1 and Department 2. Hint: Complete the product cost reports for Departments 1 and 2 before entering journal entries for transactions 6, 7, and 8. General Journal Ref. Description Debit Credit 1. 2. Work in process - Department 1 Work in process - Department 2 3. 4. Other accounts 5. Work in process - Department 1 6. 7. 8. To record sales. To record cost of goods sold. b. Prepare a product cost report (with its supporting calculations) for Department 1. Round average cost per equivalent unit to two decimal places. Use rounded answers for subsequent calculations. Round other answers to the nearest whole number. Parker Laboratories, Inc. Department 1 Flow of Units and Equivalent Units Calculations, August 2019 Equivalent Units % Work Direct % Work Conversion Done Materials Done Costs Complete/Transferred % % Ending Inventory % % Total Product Cost Report Direct Conversion Materials Costs Beginning Inventory $ Current Total Costs to Account For $ Total Equivalent Units Average cost / Equivalent unit (round 2 decimal places) $ $ Complete / Transferred: Direct Materials $ Conversion costs Cost of Goods Manufactured $ Ending Inventory: Direct Materials $ Conversion costs Cost of Ending Inventory Total Costs Allocated c. Prepare a product cost report (with its supporting calculations) for Department 2. Round average cost per equivalent unit to two decimal places. Use rounded answers for subsequent calculations. Round other answers to the nearest whole number. Parker Laboratories, Inc. Department 2 Flow of Units and Equivalent Units Calculations, August 2019 Equivalent Units % Work % Work Direct Conversion Done Materials Done Costs Complete/Transferred % Ending Inventory % Total Product Cost Report Direct Conversion Materials Costs Beginning Inventory 2$ $ Current Total Costs to Account For $4 2$ $ Total Equivalent Units Average cost / Equivalent unit (round 2 decimal places) $4 Complete / Transferred: Direct Materials Conversion costs Cost of Goods Manufactured Ending Inventory: Direct Materials $4 Conversion costs Cost of Ending Inventory $ Total Costs Allocated d. Determine the balances remaining in the Materials Inventory account, in each work in process account, and in the Finished Goods Inventory account Enter answers in the order of your journal entries in part a., using the first available answer box in the appropriate debit or credit column. Materials Inventory Bal. Bal. Work in Process- Dept. 1 Bal. Bal. Work in Process- Dept. 2 Bal. Bal. Finished Goods Inventory Bal. Bal. Parker Laboratories, Inc., produces one of its products in two successive departments. All materials are added at the beginning of the process in Department 1; no materials are used in Department 2. Conversion costs are incurred evenly in both departments. August 1, 2019, inventory account balances are as follows: Materials inventory $15,000 Work in process- Department 1 (6,000 units, 25% finished) Direct materials 11,500 Conversion costs 18,750 Work in process - Department 2 (3,500 units, 35% finished) 41,000 Finished goods inventory (4,000 units @ $12.50) 50,000 During August, the following transactions occurred: 1. Purchased material on account, $58,000. 2. Placed $63,300 (16,000 units) of materials into process in Department 1. 3. Distributed total payroll costs: $83,770 of direct labor to Department 1, $42,300 of direct labor to Department 2, and $19,100 of indirect labor to Manufacturing Overhead. 4. Incurred other actual manufacturing overhead costs, $21,200. (Credit Other Accounts.) 5. Applied overhead to the two processing departments: Department 1, $21,080, Department 2, $17,900 6. Transferred 20,000 completed units from Department 1 to Department 2. The 2,000 units remaining in Department 1 were 30% completed with respect to conversion costs. 7. Transferred 15,000 completed units from Department 2 to Finished Goods Inventory. The 8,500 units remaining in Department 2 were 40% completed with respect to conversion costs. 8. Sold 13,000 units on account at $24 per unit. Parker uses weighted average inventory costing for finished goods inventory. a. Record the August transactions in general journal form for Department 1 and Department 2. Hint: Complete the product cost reports for Departments 1 and 2 before entering journal entries for transactions 6, 7, and 8. General Journal Ref. Description Debit Credit 1. 2. Work in process - Department 1 Work in process - Department 2 3. 4. Other accounts 5. Work in process - Department 1 6. 7. 8. To record sales. To record cost of goods sold. b. Prepare a product cost report (with its supporting calculations) for Department 1. Round average cost per equivalent unit to two decimal places. Use rounded answers for subsequent calculations. Round other answers to the nearest whole number. Parker Laboratories, Inc. Department 1 Flow of Units and Equivalent Units Calculations, August 2019 Equivalent Units % Work Direct % Work Conversion Done Materials Done Costs Complete/Transferred % % Ending Inventory % % Total Product Cost Report Direct Conversion Materials Costs Beginning Inventory $ Current Total Costs to Account For $ Total Equivalent Units Average cost / Equivalent unit (round 2 decimal places) $ $ Complete / Transferred: Direct Materials $ Conversion costs Cost of Goods Manufactured $ Ending Inventory: Direct Materials $ Conversion costs Cost of Ending Inventory Total Costs Allocated c. Prepare a product cost report (with its supporting calculations) for Department 2. Round average cost per equivalent unit to two decimal places. Use rounded answers for subsequent calculations. Round other answers to the nearest whole number. Parker Laboratories, Inc. Department 2 Flow of Units and Equivalent Units Calculations, August 2019 Equivalent Units % Work % Work Direct Conversion Done Materials Done Costs Complete/Transferred % Ending Inventory % Total Product Cost Report Direct Conversion Materials Costs Beginning Inventory 2$ $ Current Total Costs to Account For $4 2$ $ Total Equivalent Units Average cost / Equivalent unit (round 2 decimal places) $4 Complete / Transferred: Direct Materials Conversion costs Cost of Goods Manufactured Ending Inventory: Direct Materials $4 Conversion costs Cost of Ending Inventory $ Total Costs Allocated d. Determine the balances remaining in the Materials Inventory account, in each work in process account, and in the Finished Goods Inventory account Enter answers in the order of your journal entries in part a., using the first available answer box in the appropriate debit or credit column. Materials Inventory Bal. Bal. Work in Process- Dept. 1 Bal. Bal. Work in Process- Dept. 2 Bal. Bal. Finished Goods Inventory Bal. Bal.
Expert Answer:
Answer rating: 100% (QA)
General journal a Ref Description Debit Credit 1 Materials inventory 58000 Accounts payable 58000 Pu... View the full answer
Related Book For
Posted Date:
Students also viewed these accounting questions
-
At mixing department, all materials are added at the beginning of the process. Lahore and overhead (conversion resources) are added evenly throughout the process. The following information pertains...
-
Assuming that all materials are added at the beginning of the process and the labor and factory overhead are applied evenly during the process, compute the figures to be inserted in the blank spaces...
-
Materials are added at the beginning of the production process at Santiago Company, which uses a FIFO process costing system. The following information on the physical flow of units is available for...
-
Calculate e y for the following values of y: (a) y = 1 (b) y = 5 (c) y = -.5 (d) y = -2.5 (e) y = 3.1 (f) y = - I (g) y = .05 (h) y = .32 (i) y = 6.1 (j) y = -5.4
-
For each of the following statements, formulate appropriate null and alternative hypotheses. Indicate whether the appropriate test will be one-tail or twotail, then sketch a diagram that shows the...
-
What is the probability of drawing a red card in a standard deck of 52 cards?
-
Are conventional financial accounting and external ecological accounting complements to each other or substitutes for each other? Discuss.
-
What is Kellys basis for her partnership interest in each of the following independent situations? The partners share the economic risk of loss from recourse liabilities according to their...
-
Problem 1 Data concerning manufacturing overhead for Selene Company are presented below. The packaging department is a cost center. An analysis of the overhead costs reveals that all variable costs...
-
A farm couple are sending their three children to the market to sell 90 apples with the objective of educating them about money and numbers. Karen, the oldest, carries 50 apples; Bill, the middle...
-
Papaya, a specialty greeting card company, purchased a photocopier costing $48,000 on January 1, 2017. Installation costs were $2,000. The equipment is expected to produce a total of 4,500,000 copies...
-
List and discuss the major information security and privacy threats to organizations.
-
Flexible benefit plans are common today. Discuss ways in which employers can ensure that employees make good choices about the benefits and benefit levels that they choose within the benefits...
-
A lot of compensation information is available to employees today on the Web (e.g., www.salary.com), and much of it is inaccurate. How can an organization assure employees that they are fairly...
-
Analyze the main reasons for HRIS implementation failure. How can we prevent these from affecting us?
-
Both PM and benefits information systems make provisions for employee access and input. What access would you provide in each of these systems, and what leeway would you provide employees in reading,...
-
What is obtained after the evaluation of the financial offer? Select the correct answer A final score to be added to the previous ones An initial price on which the contract is auctioned Three scores...
-
The comparative statements of financial position of Menachem NV at the beginning and end of the year 2019 appear below. Net income of ¬34,000 was reported, and dividends of ¬23,000 were paid...
-
How is it possible, under absorption costing, to increase net income by simply producing more goods?
-
Define differential analysis, differential revenue, differential cost, and differential income.
-
Why is unit cost information important to management?
-
A heavy machine tool is transported by a helicopter. The crate containing the machine tool weighs \(12,000 \mathrm{~N}\) and is supported by a steel cable, of length \(5 \mathrm{~m}\) and diameter...
-
The natural frequency of a spring-mass system is found to be \(2 \mathrm{~Hz}\). When an additional mass of \(1 \mathrm{~kg}\) is added to the original mass \(m\), the natural frequency is reduced to...
-
A heavy machine weighing \(9810 \mathrm{~N}\) is being lowered vertically down by a winch at a uniform velocity of \(2 \mathrm{~m} / \mathrm{s}\). The steel cable supporting the machine has a...
Study smarter with the SolutionInn App