Reference no: EM131293911
Black Swan Ltd produces “Snooze Sheep” dolls which have become very popular with the trendy university students. The company has two production departments, Assembly and Packaging departments. The following balances were recorded on 1 March 2007 for the Assembly Department:
Inventory as at 1st March 2007:
Raw Materials $3,600
Work-In-Process $11,000
Finished Goods $26,000
Required:
The following transactions have occurred during the month of March 2007 in the Assembly Department of Black Swan Ltd. Write appropriate journal entries for each of the transactions.
(a) Purchased $28,400 of raw materials on account.
(b) Incurred $48,000 of direct labour, not yet paid.
(c) Raw materials were issued for production. Raw materials balance on 31st March 2007 was $20,000.
(d) Applied overhead at the rate of $18 per machine hour. Machine hours incurred for the Assembly Department was 2000 hours.
(e) Actual manufacturing overhead for March 2007 comprised indirect labour, $22,000 and depreciation expense, $12,000.
(f) Black Swan Ltd treats any overhead variance to be immaterial.
(g) Work-In-Process balance on 31st March was $35,000.
(h) Finished Goods balance on 31st March was $10,000 and “Snooze Sheep” dolls were sold on an account with a 20% mark-up on the same day.
What is the working process for getting each entry?
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