The records of Tillman Corporation's initial and unaudited accounts show the following ending inventory balances, which must
Fantastic news! We've Found the answer you've been seeking!
Question:
The records of Tillman Corporation's initial and unaudited accounts show the following ending inventory balances, which must be adjusted to actual costs:
Units Unaudited Costs
Workinprocess inventory $
Finished goods inventory
As the auditor, you have learned the following information. Ending workinprocess inventory is percent complete with respect to conversion costs. Materials are added at the beginning of the manufacturing process, and overhead is applied at the rate of percent of the direct labor costs. There was no finished goods inventory at the start of the period. The following additional information is also available:
Units Costs
Direct Materials Direct Labor
Beginning inventory complete as to labor $ $
Units started
Current costs
Units completed and transferred to finished goods inventory
Required:
Prepare a production cost report for Tillman using the weightedaverage method.
Show the journal entry required to correct the difference between the unaudited records and actual ending balances of WorkinProcess Inventory and Finished Goods Inventory. Debit or credit Cost of Goods Sold for any difference.
If the adjustment in requirement b is not made, will the companys income and inventories be overstated or understated?
Related Book For
Fundamentals of Cost Accounting
ISBN: 978-1259565403
5th edition
Authors: William Lanen, Shannon Anderson, Michael Maher
Posted Date: