The post-closing trial balance of Custer Products, Inc. on April 30 is reproduced as follows: During May, the following transactions took place: a. Purchased raw materials at a cost of $45,000 and general factory supplies at a cost of $13,000 on account (recorded materials and supplies in the materials account). b. Issued raw materials to be used in production, costing
During May, the following transactions took place:
a. Purchased raw materials at a cost of $45,000 and general factory supplies at a cost of $13,000 on account (recorded materials and supplies in the materials account).
b. Issued raw materials to be used in production, costing $47,000, and miscellaneous factory supplies costing $15,000.
c. Recorded the payroll and the payments to employees as follows: factory wages (including $12,000 indirect labor), $41,000; and selling and administrative salaries, $7,000. Additional account titles include Wages Payable and Payroll. (Ignore payroll withholdings and deductions.)
d. Distributed the payroll in (c).
e. Recognized depreciation for the month at an annual rate of 5% on the building, 10% on the factory equipment, and 20% on the office equipment. The sales and administrative staff uses approximately one-fifth of the building for its offices.
f. Incurred other expenses totaling $11,000. One-fourth of this amount is allocable to the office function.
g. Transferred total factory overhead costs to Work in Process.
h. Completed and transferred goods with a total cost of $91,000 to the finished goods storeroom.
i. Sold goods costing $188,000 for $362,000. (Assume that all sales were made on account.)
j. Collected accounts receivable in the amount of $345,000.
k. Paid accounts payable totaling $158,000.
1. Prepare journal entries to record the transactions.
2. Set up T-accounts. Post the beginning trial balance and the journal entries prepared in (1) to the accounts and determine the balances in the accounts on May 31.
3. Prepare a statement of cost of goods manufactured, an income statement, and a balance sheet. (Round amounts to the nearest whole dollar.)
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Principles of Cost Accounting
Authors: Edward J. Vanderbeck, Maria Mitchell