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Chapter 18: Q29E (page 1016)

Hartley Company has a production process that involves three processes. Units move through the processes in this order: cutting, stamping, and then polishing. The company had the following transactions in November:

1. Cost of units completed in the Cutting Department, \(17,000

2. Cost of units completed in the Stamping Department, \)30,000

3. Cost of units completed in the Polishing Department, \(35,000

4. Sales on account, \)50,000

5. Cost of goods sold is 80% of sales

Prepare the journal entries for Hartley Company.

Short Answer

Expert verified

The journal entries to record the transfer of cost from one department to another, sales of the units, and the cost of goods sold are shown in step 2.

The cost of goods sold is $50,000.

Step by step solution

01

Step-by-Step Solution:Step 1: Manufacturing Process

The manufacturing process converts the raw material by applying the conversion cost into the finished product, and the company can sell that finished product in the market.

02

Journal entries to record the transactions

Date

Particulars

Debit ($)

Credit ($)

1.

Work-in-process inventory 鈥� Stamping department

17,000

Work-in-process inventory 鈥� Cutting dept.

17,000

2.

Work-in-process inventory-Polishing department

30,000

Work-in-process inventory-Stamping dept.

30,000

3.

Finished goods inventory

35,000

Work-in-process inventory-Polishing dept

35,00

4.

Account receivable

50,000

Sales revenue

50,000

5.

Cost of goods sold (80% of $50,000)

40,000

Finished goods inventory

40,000

03

Cost of goods sold

Costofgoodssold=Sales脳80%=$50,000脳80%=$40,000

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Most popular questions from this chapter

Question: The Cutting Department has 6,500 units in process at the end of September that are 100% complete for direct materials and 85% complete for conversion costs. Calculate the equivalent units of production for direct materials and conversion costs.

Question: What are the primary differences between job order costing systems and process costing systems?

Refer to Short Exercise S18-5. At Spring Fresh, water is added at the beginning of the filtration process. Conversion costs are added evenly throughout the process. Now assume that in February, 155,000 liters were completed and transferred out of the Filtration Department into the Bottling Department. The 45,000 liters remaining in Filtration鈥檚 ending Work-in-Process Inventory were 80% of the way through the filtration process. Recall that Spring Fresh has no beginning inventories.

Compute the equivalent units of production for direct materials and conversion

costs for the Filtration Department.

What is the purpose of the Costs Accounted For section of the production cost report?

Question: The Mixing Department of Complete Foods had 62,000 units to account for in October. Of the 62,000 units, 38,000 units were completed and transferred to the next department, and 24,000 units were 20% complete. All of the materials are added at the beginning of the process. Conversion costs are added evenly throughout the mixing process and the company uses the weighted-average method.

Compute the total equivalent units of production for direct materials and

conversion costs for October.
See all solutions

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