Q.17-22E-b - Horngren'S Financial And Managerial Accounting

Question

June production generated the following activity in Bentley Chassis Company’s Work-in-Process Inventory account:

June 1 balance	\(36,000
Direct materials used	32,000
Direct labor assigned to jobs	40,000
Manufacturing overhead allocated to jobs	28,000

Additionally, Bentley Chassis has completed Jobs 142 and 143, with total costs of

\)37,000 and $48,000, respectively.

Requirements

2. Open a T-account for Work-in-Process Inventory. Post the journal entry made in Requirement 1. Compute the ending balance in the Work-in-Process Inventory

account on June 30.

Step-by-Step Solution

Answer

Work-in-process inventory account

Particulars	Amount ($)	Particulars	Amount ($)
Beginning balance	36,000	Finished goods inventory	85,000
Direct material used	32,000
Direct labor cost	40,000
Manufacturing overhead	28,000	Closing balance	51,000
	136,000		136,000

Finished goods inventory

$$\begin{gathered} \mathbf{finished}\mathbf{ }\mathbf{goods}\mathbf{=}\mathbf{total}\mathbf{ }\mathbf{cost}\mathbf{ }\mathbf{of}\mathbf{ }\mathbf{job}\mathbf{ }\mathbf{142}\mathbf{ }\mathbf{+}\mathbf{ }\mathbf{total}\mathbf{ }\mathbf{cost}\mathbf{ }\mathbf{of}\mathbf{ }\mathbf{job}\mathbf{ }\mathbf{143} \\ \mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{=}\mathbf{\$}\mathbf{37}\mathbf{,}\mathbf{000}\mathbf{ }\mathbf{+}\mathbf{ }\mathbf{\$}\mathbf{48}\mathbf{,}\mathbf{000} \\ \mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{=}\mathbf{\$}\mathbf{85}\mathbf{,}\mathbf{000} \end{gathered}$$

Journal entry to record the finished goods inventory

Date	Particulars	Debit($)	Credit ($)
	Finished goods inventory	85,000
	Manufacturing overhead		85,000