Answer:
please find the answers below
Explanation:
Shannon corporation:
The inventory cycle of is composed of 3 phases:
1. Ordering / purchases
2. Production
3. Finished good / sales
The ordering phase is when the company orders goods and the time it takes to receive the raw materials.
The production phase is the work in process phase when the raw materials are converted into finished goods.
The finished goods/ sales phase is the time it takes to sell the goods that were manufactured.
Journal entries in a manufacturing company are used to record transactions. Adjusting journal entries are used to recognize costs and revenues in the correct period.
Dr Work – In - process $75, 000
Cr Inventory- Direct materials $$75, 000
Recording actual direct materials used
Dr Wages Payroll $55, 500
Cr Cash /Bank $55, 500
Recording direct labor wages incurred
Dr Manufacturing overhead $3, 500
Cr Inventory- Indirect materials $3, 500
Recording the cost of indirect materials incurred
Dr Manufacturing overhead $49, 000
Cr Cash/ Bank $49, 000
Recording wages payable to supervisor and engineer
Dr Manufacturing overhead $13, 000
Cr Cash/ Bank $13, 000
Plant utilities and repairs taken to manufacturing overhead
Dr Manufacturing overhead $11, 000
Cr Accumulated depreciation – plant $11, 000
Record depreciation on factory plant
Dr Finished goods $190, 000
Cr Work – In – Process $190, 000
Record of jobs completed (cost of goods manufactured)
Dr Work – in – process $76, 500
Cr Manufacturing overhead $76, 500
Record overhead applied to production
[$3, 500 + $49, 000 + $13, 000 + $11, 000 = $76, 500]
Dr Cost of goods sold $145, 000
Cr finished goods $145, 000
Record cost of jobs or goods completed and sold
