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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 $244,000 Direct labor cost 41,500 Overhead cost 207,750 Conversion cost applied 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: 1. Prepare the journal entries that would have been made using a traditional accounting approach for cost flows. Make your entries in the following order: (a) purchase of raw materials, (b) issuance of materials to production, (c) incurrence of direct labor cost, (d) incurrence of overhead cost, (e) application of overhead to production, (f) completion of goods, (g) cost of sales, (h) revenue from sales, and (i) recognition of the variance between applied and actual production costs. a. . b. c. d. e. f. g. h. 2. Prepare the journal entries for the month using backflush costing. 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) completion of goods, (d) cost of sales, (e) sales revenue, and (f) recognition of the variance between applied and actual production costs. a b. c. 11 III I II 001 III III d. e. f. Accounts Payable Accounts Receivable Cost of Goods Sold Finished Goods Inventory Materials Inventory Finished Goods Inventory Materials Inventory Overhead Control Sales Revenue Wages Payable Materials Inventory Overhead Control Sales Revenue Wages Payable Work-in-Process Inventory Accounts Payable Cash Conversion Cost Control Cost of Goods Sold Finished Goods Inventory Accounts Payable Accounts Receivable Conversion Cost Control Finished Goods Inventory Raw Materials and In Process Inventory