Questions: Process Costing Journal Entries a1. Journalize the cost of materials transferred into the Cutting Department at the beginning of 2023. The cost of materials is 775,200. Work in Process-Cutting Materials Control a2. Journalize the conversion costs for the Cutting Department. Work in Process-Cutting Various Accounts a3. Journalize the costs transferred from the Cutting Department to the Finishing Department. The cost of materials transferred is 775,200. The conversion costs charged to the Finishing Department are 6,000,000. Work in Process-Finishing Work in Process-Cutting

Process Costing Journal Entries a1. Journalize the cost of materials transferred into the Cutting Department at the beginning of 2023. The cost of materials is 775,200. Work in Process-Cutting Materials Control a2. Journalize the conversion costs for the Cutting Department. Work in Process-Cutting Various Accounts a3. Journalize the costs transferred from the Cutting Department to the Finishing Department. The cost of materials transferred is 775,200. The conversion costs charged to the Finishing Department are 6,000,000. Work in Process-Finishing Work in Process-Cutting
Transcript text: Process Costing Journal Entries a1. Journalize the cost of materials transferred into the Cutting Department at the beginning of 2023. The cost of materials is $775,200. Work in Process-Cutting Materials Control a2. Journalize the conversion costs for the Cutting Department. Work in Process-Cutting Various Accounts a3. Journalize the costs transferred from the Cutting Department to the Finishing Department. The cost of materials transferred is $775,200. The conversion costs charged to the Finishing Department are $6,000,000. Work in Process-Finishing Work in Process-Cutting
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Solution

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To address the process costing journal entries, let's break down each part of the question and provide the appropriate journal entries.

a1. Journalize the cost of materials transferred into the Cutting Department at the beginning of 2023.

The cost of materials transferred into the Cutting Department is $775,200. The journal entry to record this transaction would be:

Work in Process-Cutting      775,200
   Materials Control                  775,200

Explanation:

  • Debit "Work in Process-Cutting" to increase the account, reflecting the addition of materials to the department.
  • Credit "Materials Control" to decrease the account, indicating that materials have been used.
a2. Journalize the conversion costs for the Cutting Department.

The conversion costs for the Cutting Department are not specified in the question, so we will leave the amount blank. The journal entry would be:

Work in Process-Cutting      [Amount]
   Various Accounts                  [Amount]

Explanation:

  • Debit "Work in Process-Cutting" to reflect the addition of conversion costs (such as labor and overhead) to the department.
  • Credit "Various Accounts" to indicate the sources of these conversion costs, which could include wages payable, utilities, etc.
a3. Journalize the costs transferred from the Cutting Department to the Finishing Department.

The total cost transferred from the Cutting Department to the Finishing Department is $6,775,200, which includes $775,200 for materials and $6,000,000 for conversion costs. The journal entry would be:

Work in Process-Finishing    6,775,200
   Work in Process-Cutting           6,775,200

Explanation:

  • Debit "Work in Process-Finishing" to increase the account, reflecting the transfer of costs to the next department.
  • Credit "Work in Process-Cutting" to decrease the account, indicating that these costs have been transferred out of the Cutting Department.

These entries reflect the flow of costs through the production process in a manufacturing setting using process costing.

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