Question

Preparing journal entries-outputs Hartley Company has a production process that involves three processes. Units move through the processes in this order. cutting, stamping, and then polishing. The company had the following transactions in November: 1. Cost of units completed in the Cutting Department, $17,000 2. Cost of units completed in the Stamping Department, $30,000 3. Cost of units completed in the Polishing Department, $35,000 4. Sales on account, $50,000 5. Cost of goods sold is 80% of sales Prepare the journal entries for Hartley Company.

Answer 1

Answer:

(It is assume that completed unit have been transferred to next department)

The jounal entries for each transaction is given below.

Cost of units completed in the Cutting Department, $17,000

Debit WIP stamping Dept         $ 17,000

Credit WIP cutting Dept            $ 17,000

Cost of units completed in the Stamping Department, $30,000

Debit WIP polishing Dept              $ 30,000

Credit WIP stamping Dept            $ 30,000

Cost of units completed in the Polishing Department, $35,000

Debit Finished good                     $ 35,000

Credit WIP polishing Dept            $ 35,000

Sales on account, $50,000

Debit GOGS                          $ 40,000

Credit Finished good           $ 40,000

Debit Receivable Account   $ 50,000

Credit Sales                          $ 50,000

Answer 2

Answer:

Cutting department journal entry Dr : finished good $17,000, Cr : work in process $17,000, Stamping department journal entry Dr: finished good $30000, Cr: work in process $30,000, polishing department journal entry Dr: finished good $35,000, Dr:work in process $35,000, sales on account journal entry Dr: Account Receivable $50,000, Cr: Sales $50,000,, cost of good sold journal entry Dr:cost of good sold $40,000, Cr: finished good $40,000

Explanation:

Cutting department journal entry

Account Name Dr. Cr

$ $

Finished good. 17,000

Work In process 17,000

Stamping department journal entry

Account Name Dr. Cr

$ $

Finished good. 30,000

Work In process 30,000

Polishing department journal entry

Account Name Dr. Cr

$ $

Finished good. 35,000

Work In process 35,000

Sales on Account journal entry

Account Name Dr. Cr

$ $

Account Receivable 50,000

Sales. 50,000

Cost of good sold journal entry

Account Name. Dr. Cr

$ $

Cost of good sold. 40,000

Finished good. 40,000

Working of cost of good sold

80% of sales

= 80÷100 = 0.8

= 0.8 × 50,000

=40,000