Paradise Bay Shop is a manufacturer of golf carts. Peter Cranston, the plant manager of Paradise Bay, obtains the following information for Job # 22 in August 2020. A total of 23 units were started, and units were detected and rejected at final inspection, yielding 20 good units. The spoiled units were considered to be normal spoilage. Costs assigned prior to the inspection point are $1,300 per unit. Assu Job #22 of Paradise Bay Shop generates scrap with a total sales value of $400 (it is assumed that scrap returned to the storeroom is sold quickly). Read the requirements. Prepare the journal entries for the recognition of scrap, assuming the following: (Record debits first, then credits. Exclude explanations from any journal entries.) a. The value of scrap is immaterial and scrap is recognized at the time of sale. Journal Entry Accounts Debit Credit Requirements Prepare journal entries for the recognition of scrap, assuming the following: The value of scrap is immaterial and scrap is recognized at the time of sale. The value of scrap is material, is related to a specific job, and is recognized at the time of sale. a. b. - X c. The value of scrap is material, is common to all jobs, and is recognized at the time of sale. d. The value of scrap is material, is recognized as inventory at the time of production, and is recorded at its net realizable value.
Paradise Bay Shop is a manufacturer of golf carts. Peter Cranston, the plant manager of Paradise Bay, obtains the following information for Job # 22 in August 2020. A total of 23 units were started, and units were detected and rejected at final inspection, yielding 20 good units. The spoiled units were considered to be normal spoilage. Costs assigned prior to the inspection point are $1,300 per unit. Assu Job #22 of Paradise Bay Shop generates scrap with a total sales value of $400 (it is assumed that scrap returned to the storeroom is sold quickly). Read the requirements. Prepare the journal entries for the recognition of scrap, assuming the following: (Record debits first, then credits. Exclude explanations from any journal entries.) a. The value of scrap is immaterial and scrap is recognized at the time of sale. Journal Entry Accounts Debit Credit Requirements Prepare journal entries for the recognition of scrap, assuming the following: The value of scrap is immaterial and scrap is recognized at the time of sale. The value of scrap is material, is related to a specific job, and is recognized at the time of sale. a. b. - X c. The value of scrap is material, is common to all jobs, and is recognized at the time of sale. d. The value of scrap is material, is recognized as inventory at the time of production, and is recorded at its net realizable value.
Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter2: Accounting For Materials
Section: Chapter Questions
Problem 15P: One of the tennis rackets that Ace Sporting Goods manufactures is a titanium model (Slam) that sells...
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Transcribed Image Text:Paradise Bay Shop is a manufacturer of golf carts. Peter Cranston, the plant manager of Paradise Bay, obtains the following information for Job # 22 in August 2020. A total of 23 units were started, and 3 spoiled
units were detected and rejected at final inspection, yielding 20 good units. The spoiled units were considered to be normal spoilage. Costs assigned prior to the inspection point are $1,300 per unit. Assume that
Job #22 of Paradise Bay Shop generates scrap with a total sales value of $400 (it is assumed that scrap returned to the storeroom is sold quickly).
Read the requirements.
Prepare the journal entries for the recognition of scrap, assuming the following: (Record debits first, then credits. Exclude explanations from any journal entries.)
a. The value of scrap is immaterial and scrap is recognized at the time of sale.
Journal Entry
Accounts
Debit
(...)
Credit
Requirements
Prepare journal entries for the recognition of scrap, assuming the following:
The value of scrap is immaterial and scrap is recognized at the time of sale.
The value of scrap is material, is related to a specific job, and is recognized at
the time of sale.
a.
b.
C.
-
The value of scrap is material, is common to all jobs, and is recognized at the
time of sale.
d. The value of scrap is material, is recognized as inventory at the time
of production, and is recorded at its net realizable value.
X
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