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cgm journal entries designer rags makes evening dresses the following information w 736112

(CGM; journal entries) Designer Rags makes evening dresses. The following information was gathered from the company records for 2010, the first year of company operations. Work in Process Inventory at the end of 2010 was $31,500.

Direct material purchased on account

$1,110,000

Direct material issued to production

894,000

Direct labor payroll accrued

645,000

Indirect labor payroll accrued

186,000

Prepaid factory insurance expired

6,000

Factory utilities paid

42,900

Depreciation on factory equipment recorded

65,100

Factory rent paid

252,000

Sales (all on account)

2,862,000

The company’s gross profit rate for the year was 35 percent.

a. Compute the cost of goods sold for 2010.

b. What was the total cost of goods manufactured for 2010?

c. What is Finished Goods Inventory at December 31, 2010?

d. If net income was $250,000, what were total selling and administrative expenses for the year?

e. Prepare journal entries to record the flow of costs for the year, assuming the company uses a perpetual inventory system and a single Manufacturing Overhead Control account and that actual overhead is included in WIP Inventory.

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