Question:
Latourneau Company had the following account balances as of August 1, 2010:
|
Raw Material (direct and indirect) Inventory
|
$20,300
|
|
Work in Process Inventory
|
7,000
|
|
Finished Goods Inventory
|
18,000
|
During August, the company incurred the following factory costs:
1. Purchased $164,000 of raw material on account.
2. Issued $180,000 of raw material to production, of which $134,000 was for direct materials.
3. Accrued $88,000 in factory payroll costs; $62,000 was for direct labor and the rest was for supervisors' salaries.
4. Accrued $7,000 of utility costs; of this amount, $1,600 was fixed.
5. Accrued $2,000 of property taxes on the factory.
6. Recorded the expiration of $1,600 of prepaid insurance on factory equipment.
7. Recorded $40,000 of straight-line depreciation on factory equipment.
8. Applied actual overhead to Work in Process Inventory.
9. Transferred goods costing $320,000 to Finished Goods Inventory.
10. Recorded total sales of $700,000; of these, $550,000 were on account.
11. Recorded cost of goods sold of $330,000.
12. Recorded selling and administrative costs of $280,000 (credit "Various accounts").
Required:
a. Journalize the transactions for August.
b. Post transactions to T-accounts for Raw Material Inventory, Work in Process Inventory, Finished Goods Inventory, and Cost of Goods Sold.
c. Prepare a schedule of cost of goods manufactured for August using actual costing.
d. Prepare an income statement, including a detailed schedule of cost of goods sold.