Re-Tire produces bagged mulch made from recycled tires. Production involves shredding tires and packaging the pieces for sale in the bagging department. All direct materials enter in the first process. The following describes production operations for October Direct materials used Direct labor used 30% in Shredding; 70% in Bagging. Predetermined overhead rate (based on direct labor) Transferred to Bagging Transferred to finished goods $234,000 $121,000 165% S205,500 $590,000 The company's revenue for the month totaled $470,000 from credit sales, and its cost of goods sold for the month is $254,000. Prepare summary journal entries dated October 31 to record its October production activities for
(1) direct materials usage,
(2) direct labor incurred
(3) overhead applied,
(4) goods transfer from Shredding to Bagging,
(5) goods transfer from Bagging to finished goods,
(6) credit sales, and
(7) cost of goods

Explanation:

Re-Tire General Journal entries

1.

Dr Work in process - Shredding $234,000

Cr To Raw material Inventory $234,000

2.

Dr Work in process - Shredding $36,300

DrWork in process - bagging $84,700

Cr To Factory Wages $121,000

3.

Dr Work in process - Shredding $59,895

Dr Work in process - bagging $139,755

Cr To Factory Overhead $199,650

4.

DrWork in process - bagging $205 500

Cr To Work in process - Shredding $205,500

5.

Dr Finished Goods Inventory $590,000

Cr To Work in process - Bagging $590,000

6.

Dr Accounts Receivable $470,000

Cr To Sales Revenue $470,000

7.

DrCost of Goods Sold $254,000

Cr To Finished Goods Inventory $254,000

Explanation:

2.

Work in process - Shredding

(121,000*30%) =$36,300

Work in process - bagging

(121,000*70%)=$84,700

To Factory Wages

(84,700+36,300) =121,000

3.

Work in process - Shredding

(36,300*165%)=$59,895

Work in process - bagging

(84,700*165%)=$139,755

To Factory Overhead

(139,755+59,895)=199,650

answerimplicit;

answer the amount a seller is paid minus the cost of production;