Solved: The post closing trial balance of Custer Products

Inc on April
The post closing trial balance of Custer Products Inc on April

The post-closing trial balance of Custer Products, Inc. on April 30 is reproduced as follows:

During May, the following transactions took place:

a. Purchased raw materials at a cost of $45,000 and general factory supplies at a cost of
$13,000 on account (recorded materials and supplies in the materials account).

b. Issued raw materials to be used in production, costing $47,000, and miscellaneous factory
supplies costing $15,000.

c. Recorded the payroll and the payments to employees as follows: factory wages (including
$12,000 indirect labor), $41,000; and selling and administrative salaries, $7,000. Additional
account titles include Wages Payable and Payroll. (Ignore payroll withholdings and deductions.)

d. Distributed the payroll in (c).

e. Recognized depreciation for the month at an annual rate of 5% on the building, 10% on the
factory equipment, and 20% on the office equipment. The sales and administrative staff uses
approximately one-fifth of the building for its offices.

f. Incurred other expenses totaling $11,000. One-fourth of this amount is allocable to the office
function.

g. Transferred total factory overhead costs to Work in Process.

h. Completed and transferred goods with a total cost of $91,000 to the finished goods
storeroom.

i. Sold goods costing $188,000 for $362,000. (Assume that all sales were made on account.)

j. Collected accounts receivable in the amount of $345,000.

k. Paid accounts payable totaling $158,000.

Required:

1. Prepare journal entries to record the transactions.

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 2. Set up T-accounts. Post the beginning trial balance and the journal entries prepared in (1) to
the accounts and determine the balances in the accounts on May 31.

3. Prepare a statement of cost of goods manufactured, an income statement, and a balance

sheet. (Round amounts to the nearest whole dollar.)

The post closing trial balance of Custer Products Inc on April

ANSWER
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