FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Sharma Company has three process departments: Mixing, Encapsulating, and Bottling. At the beginning of the year, there were no work-in-process or finished goods inventories. The following data are available for the month of July:


Department
  Manufacturing
Costs Added*
  Ending Work in
Process
Mixing   $93,760   $21,930
Encapsulating   80,240   19,380
Bottling   72,790   2,950

*Includes only the direct materials, direct labor, and the overhead used to process the partially finished goods received from the prior department. The transferred-in cost is not included.

Required:

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1. Prepare journal entries that show the transfer of costs (a) from Mixing to Encapsulating, (b) from Encapsulating to Bottling, and (c) from Bottling to finished goods inventory.

a.
 
Work in Process-Mixing  
 
 
  Work in Process-Encapsulating
b.
 
Work in Process-Encapsulating  
 
 
  Work in Process-Bottling
c.
 
Work in Process-Bottling  
 
 
  Finished Goods
 
 
 

As the work is finished in a process (department), the partially completed units and all their associated costs are transferred to the next process (department) by debiting the WIP account of the process receiving the unit and crediting the WIP account of the transferring process (department).

Question Content Area

2. Post the entries made in Requirement 1 into the T-accounts below. The costs added from the data provided have been entered in the T-accounts.

WIP—Mixing
     93,760 fill in the blank df8cd7f2dfa7064_1  
  21,930    

WIP—Encapsulating
  fill in the blank df8cd7f2dfa7064_2 fill in the blank df8cd7f2dfa7064_3  
     80,240    
  19,380    

WIP—Bottling
  fill in the blank df8cd7f2dfa7064_4 fill in the blank df8cd7f2dfa7064_5  
     72,790    
  2,950    

Finished Goods
  fill in the blank df8cd7f2dfa7064_6    
 
 
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