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HOWIE STARS_Cost Accounting

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Question;Howie Stars produces stars for elementary;teachers to reward their students. Howie Stars? trial balance on June 1;follows;HOWIE;STARS;Trial Balance;June 1, 2014;Balance;Account Title Debit Credit;Cash $;14,000;Accounts;Receivable 155,000;Inventories;Raw Materials 5,700;Work-in-Process 39,400;Finished Goods 20,400;Plant;Assets 200,000;Accumulated;Depreciation $;72,000;Accounts;Payable 127,000;Wages;Payable 1,700;Common;Stock 142,000;Retained;Earnings 91,800;Sales;Revenue;Cost of;Goods Sold;Manufacturing;Overhead;Selling;and Administrative Expenses;Totals $;434,500 $ 434,500;June 1;balances in the subsidiary ledgers were as follows;-;Raw;Materials Inventory subsidiary ledger: Paper, $4,700, indirect materials;$1,000;-;Work-in-Process;Inventory subsidiary ledger: Job 120, $39,4000, Job 121, $0;-;Finished;Goods Inventory subsidiary ledger: Large Stars, $9,400, Small Stars, $11,000;June;transactions are summarized as follows;a.;Collection;on account, $152,000;b. Selling and administrative expenses;incurred and paid, $28,000;c.;Payments;on account, $36,000;d. Materials purchases on account;Paper, $22,900, indirect materials, $3,800;e. Materials requisitioned and used in;production;Job 120: Paper, $850;Job 121: Paper, $7,650;Indirect materials, $1,000;f.;Wages incurred;during June, $35,000. Labor time records for the month: Job 120, $3,500, Job;121: $ 16,600, indirect labor, $ 14,900.;g.;Wages paid in;June include the balance in Wages Payable at May 31 plus $ 32,200 of wages;incurred during June.;h.;Depreciation on;plant and equipment, $ 2, 600;i.;Manufacturing;overhead allocated at the predetermined overhead allocation rate of 50% of;direct labor cost.;j.;Jobs completed;during the month: Job 120, 300,000 Large Stars at a total cost of $ 45,500;k.;Sales on account;all of Job 120 for $ 111,000.;l.;Adjusted for;overallocated or underallocated;manufacturing overhead.;Requirements;1.) Journalize the transactions;for the company.;2.) Open T-accounts for the;general ledger, the Raw Materials Inventory subsidiary ledger, the;Work-in-Process Inventory subsidiary ledger, and the Finished Goods Inventory;subsidiary ledger. Insert each account balance as given, and use the reference Bal. Post the journal entries to the;T-accounts using the transaction letters as a reference.;3.) Prepare a trial balance at;June 30, 2014.;4.) Use the Work-in-Process;Inventory T-account to prepare a schedule of cost of goods manufactured for the;month of June.;5.) Prepare an income statement;for the month of June.

 

Paper#40096 | Written in 18-Jul-2015

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