Select your language

Suggested languages for you:
Log In Start studying!
Answers without the blur. Just sign up for free and you're in → Illustration

19-5TI

Expert-verified
Horngren'S Financial And Managerial Accounting
Found in: Page 1053

Short Answer

Malone Company has adopted a JIT management system and has the following transactions in August:

a. Purchased raw materials on account, $50,000.

b. Incurred labor and overhead costs, $70,000.

c. Completed 500 units with standard costs of $95 for direct materials and $150 for conversion costs.

d. Sold on account 475 units for $300 each.

10. Record the journal entries for Malone Company for August.

11. Open a T-account for Conversion Costs

Finished Goods Inventory: $122,500

Over Allocated Conversion Cost: $5,000

See the step by step solution

Step by Step Solution

Journal Entries

Date

Description

Debit

Credit

a)

Raw and In-process Inventory

$50,000

Accounts Payable

$50,000

Being inventory purchased

b)

Conversion Cost

$70,000

Overhead payable

$70,000

Being labor and overhead cost incurred

c)

Finished Goods Inventory

$122,500

Raw and In-process Inventory

$47,500

Conversion Cost

$75,000

Being inventory and overhead costs transferred

d)

Accounts Receivables

$142,500

Sales revenue

$142,500

Being Sales made on account

Cost of goods sold

$116,375

Finished Goods Inventory

$116,375

Being cost of goods incurred for sale

‘T’ account for Conversion Cost

Conversion Cost

Date

Particular

Amount

Date

Particular

Amount

b)

Overheads payable

$70,000

c)

Finished Goods inventory

$75,000

Aug 31

Cost of Goods Sold

$5,000

Journal Entry for overallocation

Date

Description

Debit

Credit

Aug 31

Conversion Cost

$5,000

Cost of Goods Sold

$5,000

Being over allocation adjusted

Most popular questions for Business-studies Textbooks

Icon

Want to see more solutions like these?

Sign up for free to discover our expert answers
Get Started - It’s free

Recommended explanations on Business-studies Textbooks

94% of StudySmarter users get better grades.

Sign up for free
94% of StudySmarter users get better grades.