Answer:
Sunset Products
a) Journal Entries:
Transactions General Journal Debit Credit
Materials Inventory $24,500
Accounts Payable $24,500
To record the purchase of materials on account.
Manufacturing Overhead $1,450
Materials Inventory $1,450
To record the issue of supplies.
Materials Inventory $25,900
Accounts Payable $25,900
To record the purchase of materials on account.
Accounts Payable $24,500
Cash Account $24,500
To record the payment on account.
Work-in-Process Inventory $30,900
Materials Inventory $30,900
To record the issue of direct materials to the production department.
Work-in-Process Inventory $29,500
Factory Wages $29,500
To record direct labor costs to work in process.
Manufacturing Overhead $22,400
Cash Account $22,400
To record the payment for utilities and other expenses.
Work-in-Process Inventory $35,400
Manufacturing Overhead $35,400
To apply overhead to work in process.
Manufacturing Overhead $5,900
Depreciation Expense $5,900
To recognize depreciation on property, plant, and equipment.
Manufacturing overhead applied $29,750
Manufacturing overhead $29,750
To transfer manufacturing overhead to the overhead applied account.
b) T-accounts:
Materials Inventory
Transaction Details Debit Credit
Beginning balance $ 13,500
Accounts Payable 24,500
Manufacturing overhead $1,450
Accounts Payable 25,900
Work-in-Process Inventory 30,900
Ending balance $31,550
Work-in-Process Inventory
Transaction Details Debit Credit
Beginning balance $24,750
Materials Inventory 30,900
Factory Wages 29,500
Manufacturing Overhead 35,400
Finished Goods Inventory $71,600
Ending balance 54,200
Finished Goods Inventory
Transaction Details Debit Credit
Beginning balance $97,500
Work-in-Process 71,600
Cost of goods sold $114,350
Ending balance 54,750
Cost of Goods Sold
Transaction Details Debit Credit
Beginning balance $120,000
Overapplied overhead $5,650
Ending balance 114,350
Manufacturing Overhead Control Account
Transaction Details Debit Credit
Materials Inventory $1,450
Cash Account 22,400
Depreciation expense 5,900
Manufacturing overhead applied $29,750
Manufacturing Overhead Applied
Transaction Details Debit Credit
Work in Process $35,400
Manufacturing overhead $29,750
Overapplied overhead 5,650
Accounts Payable
Transaction Details Debit Credit Materials Inventory $24,500
Materials Inventory 25,900
Cash Account $24,500
Ending Balance 25,900
Cash Account
Transaction Details Debit Credit
Accounts Payable $24,500
Manufacturing Overhead 22,400
Explanation:
a) Data and Calculations:
Accounts balances of Sunset Products for March:
Beginning Ending
Materials Inventory $ 13,500 ?
Work-in-Process Inventory 24,750 ?
Finished Goods Inventory 97,500 $ 54,750
Cost of Goods Sold 120,000