ACC 202 Howie Stars produces starts for elementary teachers to reward their students

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Project Part 2

Howie Stars produces starts 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 $19,000
Accounts receivable 188,000
Inventories:
Materials 5,700
Work in process 42,500
Finished goods 22,000
Plant assets 260,000
Accumulated depreciation $70,000
Accounts payable 135,000
Wages payable 1,700
Common stock 140,000
Retained earnings 190,500
Sales revenue —
Cost of goods sold —
Manufacturing overhead —
Marketing and general expenses —
Total 537,200 537,200
June 1 balances in the subsidiary ledgers were as follows:
– Materials subledger: Paper, $4,700; indirect materials, $1,000
– Work in process subledger: Job 120, $42,500; $0 for Job 121
– Finished goods subledger: Large Stars, $9,600; Small Stars, $12,400
June transactions are summarized as follows:
a. Collections on account, $141,000.
b. Marketing and general expenses incurred and paid, $22,000.
c. Payments on account, $42,000.
d. Materials purchases on credit: Paper, $22,900; indirect materials, $4,300.
e. Materials used in production (requisitioned): – Job 120: paper , $850 – Job 121: paper, $7,750 – Indirect materials, $1,800
f. Wages incurred and assigned during June, $34,000. Labor time records for the month: Job 120, $4,500; Job 121, $16,600; indirect labor, $12,900.
g. Wages paid in June include the balance in the Wages payable account at May 31 and $31,300 of wages incurred during June.
h. Depreciation on plant and equipment, $2,700.
i. Manufacturing overhead was allocated at the predetermined rate of 60% of direct labor cost.
j. Jobs completed during the month: Job 120, 200,000 Large Stars at total cost of $55,550.
0 k. Credit sales on account: all of Job 120 for $104,000.
l. Closed the Manufacturing overhead account to Cost of goods sold.
Requirements:
1. Journalize the transactions for the company. Howie uses a perpetual inventory system.
2. Open T-accounts for the general ledger, the Materials ledger, the Work in process ledger, and the Finished goods 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. 6
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.
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