Comprehensive accounting for manufacturing transactions

Question

Question:

Comprehensive accounting for manufacturing transactions Howie Stars produces stars for elementary teachers to reward their students. Howie Stars' trial balance on June 1 follows:

HOWIE STARS Trial Balance June 1, 2012
	Balance
Account Title	Debit	Credit
Cash	$ 14,000
Accounts receivable	155,000
Inventories:
Materials	5,700
Work in process	39,400
Finished goods	20,400
Plant assets	200,000
Accumulated depreciation		$ 72,000
Accounts payable		127,000
Wages payable		1,700
Common stock		142,000
Retained earnings		91,800
Sales revenue	-	-
Cost of goods sold	-
Manufacturing overhead	-
Marketing and general expenses	-
Total	$434,500	$434,500

a. June 1 balances in the subsidiary ledgers were as follows:

b. Materials subledger: Paper, $4,700; indirect materials, $1,000

c. Work in process subledger: Job 120, $39,400; $0 for Job 121

d. Finished goods subledger: Large Stars, $9,400; Small Stars, $11,000

June transactions are summarized as follows:

Collections on account, $152,000.

1.    Marketing and general expenses incurred and paid, $28,000.

2.    Payments on account, $36,000.

3.    Materials purchases on credit: Paper, $22,900; indirect materials, $3,800.

4.    Materials used in production (requisitioned):

• Job 120: paper, $850
• Job 121: paper, $7,650
• Indirect materials, $1,000

e. Wages incurred and assigned during June, $35,000. Labor time records for the month: Job 120, $3,500; Job 121, $16,600; indirect labor, $14,900.

f. Wages paid in June include the balance in the Wages payable account at May 31 and $32,200 of wages incurred during June.

g. Depreciation on plant and equipment, $2,600.

h. Manufacturing overhead was allocated at the predetermined rate of 50% of direct labor cost.

i. Jobs completed during the month: Job 120, 300,000 Large Stars at total cost of $45,500.

j. Credit sales on account: all of Job 120 for $111,000.

k. Closed the Manufacturing overhead account to Cost of goods sold.