Problem - On August 1, Cimino Company had the following balances in its inventory accounts:
Materials inventory $16,350
Work in process inventory 21,232
Finished goods inventory 15,200
Work in process inventory is made up of three jobs with the following costs:
Job 30 job 31 job 32
Direct materials $2,650 $1,900 $3,650
Direct labor 1,900 1,340 4,000
Applied overhead 1,520 1,072 3,200
During August, Cimino Company experienced the following transactions:
a. Purchases materials on account for $21,00
b. Requisitioned materials: job 30 $12,500, job $31 11,200, job 32 $5,500
c. Collected and summarized job tickets job 30 250 hours at $12 per hour, job 31 275 hours at $15 per hour and job 32 140 hours at $20 per hour
d. Applied overhead on the basis of direct labor
e. Actual overhead was $8,718
f. Completed and transferred job 31 to the finished goods warehouse
g. Shipped job 31 and billed the customer for 130 percent of the cost
Required -
1. Prepare journal entries for the august transactions.
2. Calculate the ending balances of each of the inventory accounts as of August 31.