The cost of materials transferred into the Bottling Department of Mountain Springs Water Company is $32,400, with $26,000 from the Purifying Department, plus an additional $6,400 from the materials storeroom. The conversion cost for the period in the Bottling Department is $8,750 ($3,750 factory applied and $5,000 direct labor). The total cost transferred to finished goods for the period was $31,980. The Bottling Department had a beginning inventory of $1,860. Required:

a. Journalize the entries to record the cost of transferred-in materials, conversion costs, and the cost transferred out to finished goods. Refer to the Chart of Accounts for exact wording of account titles.
b. Determine the balance of Work in Process—Bottling at the end of the period.



Explanation:

Bottling dept CostsAmt $  

Beginning Inventory              1,860  

Materials costs  

Add Material_purifying            26,000  

Stores Materials              6,400  

Conversion costs  

Direct Labor              5,000  

Fact OH applied              3,750  

Total Production cost            43,010  

Transferred out to FG            31,980  

WIP in Bottling            11,030  

Journal Entry  

AccountDr $Cr $

1Materials transfer In  

WIP Bottling (Materials)            26,000  

Transfer out Purify to Bottling           26,000

( materials trsfd from Purifying to bottling)  

Inventory             6,400

WIP Bottling (Materials)              6,400  

(Materials issue from stores)  

2Coversion costs  

WIP Bottling (direct labor)              5,000  

Direct wages Payable             5,000

(direct labor cost )  

WIP Bottling (Overhead applied)              3,750  

Overhead Control A/C             3,750

(OH applied)  

3Transfer Out  

Finished Goods            31,980  

WIP Bottling           31,980

WIP in bottling at month end is$ 11,030.00  

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