Stars produces stars for elementary teachers to reward their students. Teacher Stars' trial balance on June 1follows:
Teacher StarsTrial Balance June 1, 2016
Balance
Account Title Debit Credit
Cash $22,000
Accounts Receivable 188,000
Inventories:
Raw Materials 6,300
Work-in-Process 40,000
Finished Goods 22,800
Plant Assets 300,000
Accumulated Depreciation $68,000
Accounts Payable 133,000
Wages Payable 2,000
Common Stock 147,000
Retained Earnings 229,100
Sales Revenue
Cost of Goods Sold
Manufacturing Overhead
Selling and Administrative Expenses
Total $579,100 $579,100
June1 balances in the subsidiary ledgers were as follows:
Raw Materials Inventory subsidiaryledger: Paper,$ 4,700 indirectmaterials, $1,600
Work-in-Process Inventory subsidiary ledger: Job120,$40,000 Job 121, $0
Finished Goods Inventory subsidiary ledger: LargeStars,$9,600; Small Stars, $13,200
June transactions are summarized as follows:
A. Collections on account, $144,000.
B. Selling and administrative expenses incurred and paid, $27,000.
C. Payments on account, $37,000.
D. Materials purchased on account: Paper, $23,300; indirect materials, $4,000.
E. Materials requisitioned and used in production: Job 120: Paper, $ 450 Job 121: Paper, $ 7,550 Indirect materials, $ 1,200.
F. Wages incurred during , . Labor time records for the month: Job 120, ; Job 121, ; indirect labor, . June $34,000, $3,250, $16,600, $14,150.
G. Wages paid in include the balance in the Wages Payable at plus of wages incurred during . June May 31 $31,200 June.
H. Depreciation on plant and equipment, $3,400.
I. Manufacturing overhead allocated at the predetermined overhead allocation rate of 60% of direct labor cost. J. Jobs completed during the month: Job 120 with 900,000 Large Stars at a total cost of $45,650.
K. Sales on account: all of Job 120 for $100,000.
L. Adjusted for overallocated or underallocated manufacturing overhead.
1. Journalize the transactions for the company.
2. 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 have been opened for you along with each account's balance as given. Post the journal entries to the T-accounts using the transaction letters as a reference.
3. Prepare a trial balance at June 30, 2016.
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.