Sample ProblemsSample ProblemsSample ProblemsSample Problems

Exercise 28.1 and 28.2Exercise 28.1 and 28.2

Exercise 28.1The following selected items appeared in the adjusted trial balance columns of the worksheet for Peyton Company on

December 31, 2007. From this information, prepare the section of the statement of cost of goods manufactured relating to the

cost of raw materials used.

PEYTON COMPANYStatement of Cost of Goods Manufactured (partial)

Year ended December 31, 2007

Raw MaterialsRaw Materials inventory, Jan 1 50,000Materials Purchases 695,000Freight-In 15,000Delivered cost of purchases 710,000Less purchase Ret. & allowance 5,000Net Purchases 705,000Total Materials Available 755,000Less Raw Materials Inventory, Dec 31 49,000Raw Materials Used 706,000

Exercise 28.2Using the data from exercise 28.1, prepare the general

journal entry to record adjustments for inventory accounts

2007 Adjusting EntriesDec 31 Manufacturing Summary 50,000

Raw Materials Inventory 50,000 31 Raw Materials Inventory 49,000

Manufacturing Summary 49,000 31 Manufacturing Summary 85,000

Work in Process Inventory 85,000 31 Work in Process Inventory 75,000

Manufacturing Summary 75,000 31 Income summary 61,000

Finished goods inventory 61,000 31 Finished goods inventory 59,000

Income Summary 59,000