Backflush Costing: Variation 2 Potter Company has installed a JIT purchasing and manufacturing system and is using backflush accounting for its cost flows. It currently uses a two-trigger approach with the purchase of materials as the first trigger point and the completion of goods as the second trigger point. During the month of June, Potter had the following transactions: Raw materials purchased Direct labor cost $242,000 41,500 Overhead cost Conversion cost applied 207,750 269,750" *$41,500 labor plus $228,250 overhead. There were no beginning or ending inventories. All goods produced were sold with a 50 percent markup. Any variance is closed to Cost of Goods Sold. (Variances are recognized monthly.) Required: Prepare the journal entries for the month of June using backflush costing, assuming that Potter uses the sale of goods as the second trigger point instead of the completion of goods. For a compound transaction, if an amount box does not require an entry, leave it blank. Prepare your entries in the following order: (a) purchase of raw materials, (b) incurrence of direct labor and overhead costs, (c) cost of sales, (d) sales revenue, and (e) recognition of the variance between applied and actual production costs. a. Raw Materials and In Process Inventory Accounts Payable b. Conversion Cost Control Accounts Payable Wages Payable c. Cost of Goods Sold Raw Materials and In Process Inventory Conversion Cost Control 242,000 249,250 DO 511,750 242,000 207,750 41,500 242,000 269,750 d. Accounts Receivable Sales Revenue e. Conversion Cost Control Cost of Goods Sold 767,626 767,625 20,500 20,500