Malone Company has adopted a JIT management system and has the following transactions in August:

a. Purchased raw materials on account, \(50,000.

b. Incurred labor and overhead costs, \)70,000.

c. Completed 500 units with standard costs of \(95 for direct materials and \)150 for conversion costs.

d. Sold on account 475 units for $300 each.

10. Record the journal entries for Malone Company for August.

11. Open a T-account for Conversion Costs

Date

Description

Debit

Credit

a)

Raw and In-process Inventory

$50,000

Accounts Payable

$50,000

Being inventory purchased

b)

Conversion Cost

$70,000

Overhead payable

$70,000

Being labor and overhead cost incurred

c)

Finished Goods Inventory

$122,500

Raw and In-process Inventory

$47,500

Conversion Cost

$75,000

Being inventory and overhead costs transferred

d)

Accounts Receivables

$142,500

Sales revenue

$142,500

Being Sales made on account

Cost of goods sold

$116,375

Finished Goods Inventory

$116,375

Being cost of goods incurred for sale

Date

Particular

Amount

Date

Particular

Amount

b)

Overheads payable

$70,000

c)

Finished Goods inventory

$75,000

Aug 31

Cost of Goods Sold

$5,000

Date

Description

Debit

Credit

Aug 31

Conversion Cost

$5,000

Cost of Goods Sold

$5,000

Being over allocation adjusted