Ending Work in Process Inventory
Determine the amounts for the following 9. a) Ending Work-in-Process Inventory in Units AND Dollars b) Ending Finished Goods Inventory in Units AND Dollars c) Cost of Goods Sold d) Over/Under Applied Manufacturing Overhead e) Show and calculate an Income Statement f) Over or Under applied COGS g) Gross Profit h) Net Income 10. Prepare the necessary Journal Entries related to the manufacturing cycle using the chart of account numbers instead of account names when entering the journal entries. A chart of Accounts is shown below.
For example: Instead of Debit Raw Materials – Plastic I would debit account number 12000 $5,000 and credit 10000 $5,000 when purchasing the raw materials plastic for cash. An example will be provided for each journal entry. Please follow the instructions carefully. Assets 10000 Cash 11000 Accounts Receivable 12000 Raw Materials – Plastic 12100 Raw Materials – Wheels Work in 12200 process Factory 12300 Overhead Finished 12400 Goods Liabilities 20000 Accounts Payable 21000 Wages Payable Revenues 40000 Sales Expenses 50000 COGS Manufacturing Process Information Teddy started a small manufacturing plant that fabricates small scale trucks. The manufacturing process starts with plastic pellets being put into a plastic molding machine. After the trucks are shaped in the mold, they are cooled and then inspected. If the truck passes inspection, the wheels are added at the end and they are transferred to finished goods. This process is completely automated. Direct material plastic is added 100 % at the beginning of the process; direct material wheels are added 100% as the last step in the process Conversion costs are added equally throughout the process. Conversion is 45 % complete for the beginning inventory work in process and 55 % complete for the ending inventory work in process. At the beginning of the accounting period, Teddy started 5,200 trucks into production. The estimated factory overhead is $1,300. This information is to be used to determine the application rate for overhead. Estimated and actual direct labor costs totaled $2,000. The actual factory overhead costs totaled $1,500. Selling and Administrative Expenses totaled $1,000 The following information is available concerning the direct materials Direct Materials-Plastic Beginning inventory Purchase of plastic O pounds @$2.50 a pound 2,800 pounds@ $2.50 a pound 200 pounds@$2.50 a pound Ending Inventory One pound of plastic makes 2 trucks Direct Materials- Wheels (there are four wheels for each truck) O wheels@$0.10 a wheel 20,800 wheels @ $0.10 a wheel Beginning inventory Purchase of wheels The work in process account has the following information Beginning Work in Process contains 0 trucks Ending work in process contains 300 trucks The finished goods account has the following Information 0 trucks Beginning Finished Goods Ending Finished Goods Tax rate is 35 % 2,000 trucks 2900 trucks were sold at $6.50.