Question:
JOURNAL ENTRIES Lawson Company has three process departments: mixing, encapsulating, and bottling. At the beginning of the fiscal year (July 1), there were no work-in-process or finished goods inventories. The following data are available for the month of July:
|
Department
|
Manufacturing Costs Added*
|
Ending Work in Process
|
|
Mixing
|
$540,000
|
$135,000
|
|
Encapsulating
|
495,000
|
112,500
|
|
Bottling
|
450,000
|
22,500
|
*Includes only the direct materials, direct labor, and the overhead used to process the partially finished goods received from the prior department. The transferred-in cost is not included.
Required:
1. Prepare journal entries that show the transfer of costs from one department to the next (including the entry to transfer the costs of the final department).
2. Prepare T-accounts for the entries made in Requirement 1. Use arrows to show the flow of costs.