HOWIE STARS_Cost Accounting

| July 29, 2018

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, 2014

Balance
Account Title Debit Credit
Cash $
14,000
Accounts
Receivable 155,000
Inventories:
Raw 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
Selling
and Administrative Expenses
Totals $
434,500 $ 434,500

June 1
balances in the subsidiary ledgers were as follows:

Raw
Materials Inventory subsidiary ledger: Paper, $4,700; indirect materials,
$1,000

Work-in-Process
Inventory subsidiary ledger: Job 120, $39,4000; Job 121, $0

Finished
Goods Inventory subsidiary ledger: Large Stars, $9,400; Small Stars, $11,000
June
transactions are summarized as follows:
a.
Collection
on account, $152,000
b. Selling and administrative expenses
incurred and paid, $28,000
c.
Payments
on account, $36,000
d. Materials purchases on account:
Paper, $22,900; indirect materials, $3,800
e. Materials requisitioned and used in
production:
Job 120: Paper; $850
Job 121: Paper, $7,650
Indirect materials, $1,000

f.
Wages incurred
during June, $35,000. Labor time records for the month: Job 120, $3,500; Job
121: $ 16,600; indirect labor, $ 14,900.
g.
Wages paid in
June include the balance in Wages Payable at May 31 plus $ 32,200 of wages
incurred during June.
h.
Depreciation on
plant and equipment, $ 2, 600
i.
Manufacturing
overhead allocated at the predetermined overhead allocation rate of 50% of
direct labor cost.
j.
Jobs completed
during the month: Job 120, 300,000 Large Stars at a total cost of $ 45,500
k.
Sales on account:
all of Job 120 for $ 111,000.
l.
Adjusted for
overallocated or underallocated
manufacturing overhead.

Requirements:

1.) Journalize the transactions
for the company.
2.) Open T-accounts for the
general ledger, the Raw Materials Inventory subsidiary ledger, the
Work-in-Process Inventory subsidiary ledger, and the Finished Goods Inventory
subsidiary ledger. Insert each account balance as given, and use the reference Bal. Post the journal entries to the
T-accounts using the transaction letters as a reference.
3.) Prepare a trial balance at
June 30, 2014.
4.) Use the Work-in-Process
Inventory T-account to prepare a schedule of cost of goods manufactured for the
month of June.
5.) Prepare an income statement
for the month of June.

Get a 30 % discount on an order above $ 100
Use the following coupon code:
ESSAY30
Positive SSL