The following trial balance was taken from the records of Felton Manufacturing Company at the beginning of 2014.

Transactions for the Accounting Period
1. Felton purchased $5,200 of direct raw materials and $600 of indirect raw materials on account. The indirect materials are capitalized in the Production Supplies account. Materials requisitions showed that $4,000 of direct raw materials had been used for production during the period. The use of indirect materials is determined at the end of the period by physically counting the supplies on hand at the end of the year.
2. By the end of the accounting period, $4,000 of the accounts payable had been paid in cash.
3. During the year, direct labor amounted to 1,200 hours recorded in the Wages Payable account at $6 per hour.
4. By the end of the accounting period, $6,500 of the Wages Payable account had been paid in cash.
5. At the beginning of the accounting period, the company expected overhead cost for the period to be $5,500 and 1,250 direct labor hours to be worked. Overhead is applied based on direct labor hours, which, as indicated in Event 3, amounted to 1,200 for the year.
6. Administrative and sales expenses for the period amounted to $1,400 paid in cash.
7. Utilities and rent for production facilities amounted to $3,000 paid in cash.
8. Depreciation on the plant and equipment used in production amounted to $2,000.
9. Assume that $15,000 of goods were completed during the period.
10. Assume that $10,000 of finished goods inventory was sold for $14,000 cash.
11. A count of the production supplies revealed a balance of $250 on hand at the end of the accounting period.
12. Any over- or underapplied overhead is considered to be insignificant.

Required a. Open T-accounts with the beginning balances shown in the preceding list and record all transactions for the period including closing entries in the T-accounts. (Note: Open new T-accounts as needed.)
b. Prepare a schedule of cost of goods manufactured and sold, an income statement, and a balancesheet.

  • CreatedFebruary 07, 2014
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