Answer:
Raw Materials Debit Credit
Beginning balance $12, 480 Journal 2 $16, 860
Journal 1 $16, 880
Journal 5 $2, 040 Balance b/d $14, 540
$31, 400 $31, 400
Ending balance $14, 540
Work in Process Debit Credit
Beginning balance $10, 600 Journal 5 $2, 040
Journal 2 $16, 860
Journal 9 $27, 946 Balance b/d $84, 766
Journal 6 $31, 400
$86, 806 $86, 806
Ending balance $84, 766
Finished Good Debit Credit
Beginning balance $2, 650 Cost of goods sold $73, 700
Work in process $78, 010
Balance b/d $6, 960
$80, 660 $80, 660
Ending balance $6, 960
Cost of Goods Sold Debit Credit
Finished Goods $73, 700 Income Summary $73, 700
Explanation:
Before we can prepare the inventory ledger accounts, we have to record journal entries of the transactions so that it may be easy to arrive at the balances of the accounts.
1. Dr Raw materials inventory $16, 880
Cr Accounts payable $16, 880
To record the raw material purchases
2. Dr Work in process inventory $16, 860
Cr Raw materials inventory $16, 860
To record direct materials issued to the production department
3. Dr Supplies $1, 360
Cr Raw materials inventory $1, 360
To record supplies issued
4. Dr accounts payable $16, 880
Cr cash $16, 880
To record the payment of the materials purchased on account
5. Dr Raw materials inventory $2, 040
Cr Work in process inventory $2, 040
To record inventory returned by the production department
6. Work in process inventory $31, 400
Cr Cash $31, 400
To record the payment of direct labor
7. Dr factory overhead $17, 220
Cr Accounts payable $17, 220
To record miscellaneous items purchased for the manufacturing plant
8. Dr Factory overhead $35, 400
Cr Accumulated depreciation $35, 400
To record depreciation on the manufacturing plant
9. Dr work in process inventory $27, 946
Cr Factory overhead $27, 946
To record overhead cost applied in July
We can now prepare the inventory ledger accounts
Raw Materials Debit Credit
Beginning balance $12, 480 Journal 2 $16, 860
Journal 1 $16, 880
Journal 5 $2, 040 Balance b/d $14, 540
$31, 400 $31, 400
Ending balance $14, 540
Work in Process Debit Credit
Beginning balance $10, 600 Journal 5 $2, 040
Journal 2 $16, 860
Journal 9 $27, 946 Balance b/d $84, 766
Journal 6 $31, 400
$86, 806 $86, 806
Ending balance $84, 766
Finished Good Debit Credit
Beginning balance $2, 650 Cost of goods sold $73, 700
Work in process $78, 010
Balance b/d $6, 960
$80, 660 $80, 660
Ending balance $6, 960
Cost of Goods Sold Debit Credit
Finished Goods $73, 700 Income Summary $73, 700
