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Are my journal entries correct? Please find the assignment attached. Thank you.
4 pages ACC-Week2.docx

P3-1B Buehler Company manufactures a nutrient, Everlife, through two manufacturing
processes: Blending and Packaging. All materials are entered at the beginning of each
process. On August 1, 2011, inventories consisted of Raw Materials $5,000, Work in
Process—Blending $0, Work in Process—Packaging $3,945, and Finished Goods $7,500.
The beginning inventory for Packaging consisted of 500 units, two-fifths complete as to
conversion costs and fully complete as to materials. During August, 9,000 units were
started into production in Blending, and the following transactions were completed.
1. Purchased $25,000 of raw materials on account.
2. Issued raw materials for production: Blending $18,930 and Packaging $9,140.
3. Incurred labor costs of $23,770.
4. Used factory labor: Blending $13,320 and Packaging $10,450.
5. Incurred $41,500 of manufacturing overhead on account.
6. Applied manufacturing overhead at the rate of $25 per machine hour. Machine hours
were Blending 900 and Packaging 300.
7. Transferred 8,200 units from Blending to Packaging at a cost of $44,940.
8. Transferred 8,600 units from Packaging to Finished Goods at a cost of $67,490.
9. Sold goods costing $62,000 for $90,000 on account.
Journalize the August transactions.
Account Titles & Explanation
Raw Materials
Accounts Payable
2 3&4 5 6 7 WIP- Blending
WIP- Packaging
Raw Materials Inventory 18,930.00
9,140.00 WIP- Blending
WIP- Packaging
Factory Labor 13,320.00
10,450.00 Manufacturing Overhead
Accounts Payable 41,500.00 WIP- Blending
WIP- Packaging
Manufacturing Overhead
(To assign overhead to production) 22,500.00
7,500.00 WIP- Packaging
WIP- Blending 44,940.00 28,070.00 23,770.00 41,500.00 30,000.00 44,940.00 8 9 Finished Goods
WIP- Packaging 67,490.00 COGS
Finished Goods 62,000.00 Accounts Receivable
Sales 90,000.00 BYP2-2 In the course
of routine checking of
all journal entries
prior to preparing
reports, Diane Riser
discovered several
strange entries. She
recalled that the
son Ron had come in
to help out during an
especially busy time
and that he had
some journal entries.
She was relieved that
there were only a few
of his entries, and
more relieved that he
had included rather
lengthy explanations.
The entries Ron made
Work in Process
Inventory 25,000
Cash 25,000
(This is for materials
put into process. I
don’t find the record 67,490.00 62,000.00 90,000.00 that we paid for these,
so I’m crediting
Cash, because I know
we’ll have to pay for
them sooner or later.)
Overhead 12,000
Cash 12,000
(This is for bonuses
paid to salespeople. I
know they’re part of
overhead, and I can’t
find an account called
Overhead” or “Other
Overhead” so I’m
it in Manufacturing
Overhead. I have the
check stubs, so I
know we paid these.)
Wages Expense
Cash 120,000
(This is for the
factory workers’
wages. I have a note
that payroll taxes are
I still think that’s part
of wages expense,
and that we’ll have to
pay it all in cash
sooner or later, so I
credited Cash for the
wages and the taxes.)
Work in Process
Inventory 3,000
Raw Materials
Inventory 3,000
(This is for the glue
used in the factory. I
know we used this to make the products,
even though we
didn’t use very much
on any one of the
products. I got it out
inventory, so I
credited an inventory
(a) How should Ron
have recorded each of
the four events?
(b) If the entry was
not corrected, which
financial statements
(income statement or
sheet) would be
affected? What
balances would be
overstated or
understated? BYP2-2
Account Titles &
Raw Materials
Bonus ExpenseSales
Wages Expense
Tax Expense
Payroll Credit 25,000.00
120,000.00 4 WIP
Overhead 3,000.00
3,000.00 1. The first entry would have affected the balance sheet because it was crediting cash, when
Raw Materials
was actually the account that should have been credited. This would cause cash to be
understated on the
balance sheet.
2. This entry would have affected the income statement if it had not been corrected, since all
bonuses and payroll
are reported on the income statement.
3. This entry would also have affected the income statement, because all payroll related entries
are reflected on
the balance sheet.
4. This entry would have affected the balance sheet if it were not adjusted because all inventory
related items
are presented on the balance sheet.

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Top Answer

All of your answers look quite correct. I did do... View the full answer

3 pages ACC-Week2.docx

P3-1B Buehler Company manufactures a nutrient, Everlife, through two manufacturing
processes: Blending and Packaging. All materials are entered at the beginning of each process.
On August 1, 2011,...

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