question archive The Magnolia Corporation has a cycle time of 1
The Magnolia Corporation has a cycle time of 1
Subject:AccountingPrice:2.87 Bought7
The Magnolia Corporation has a cycle time of 1.5 days, uses a raw and in process account, and charges all conversion costs to Cost of Goods Sold. At the end of each month, all inventories are counted, their conversion cost components are estimated, and inventory account balances are adjusted. Raw materials cost is backflushed from raw and in process account to finished goods. The following information is for July.
Beginning balance of RIP account, including P 14,040 of conversion cost 23,400
Beginning balance of finished goods account, including P14,400 of conversion cost24,000
Raw materials received on credit 444,000
Ending RIP inventory per physical count, including P15,360 conversion cost estimate25,600
Ending FG inventory per physical count, including P1 1,400 conversion cost estimate 19,000
Conversion cost (direct labor - P210,000; factory overhead - P189,000)
Required: Journal entries to record the given transactions
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Answer:
1) Raw and In Process 444,000
Accounts payable 444,000
2) Finished goods 443,120
Raw and In process 443,120
Purchases 444,000
Mat. In RIP beg ( 23,400 - 14,040 ) 9,360
Mat. In RIP end ( 25,600 - 15,360 ) ( 10,240)
Mat. Content of FG 443,120
3) Cost of goods sold 399,000
Accrued payroll 210,000
FO Applied 189,000
3 )Cost of goods sold 445,120
Finished goods 445,120
Mat. Content of FG 443,120
Mat. In FG beg. ( 24,000 - 14,400 ) 9,600
Mat. In FG end ( 19,000 - 11,400 ) ( 7,600 )
Mat. Content of units sold 445,120
4) Raw and In Process 1,320
Cost of goods sold 1,320
Conversion cost in RIP end 15,360
Conversion cost in RIP beg ( 14,040 )
Adjustment 1,320
5) Cost of goods sold 3,000
Finished goods 3,000
Conversion cost in FG end 11,400
Conversion cost in FG beg ( 14,400 )
Cost of goods sold 1,000
Adjustment (3,000)
