RECEIVED
Receiving
Report
Number
31
37
200
106
115
320
July 1 300 $5,400
July 2
July 6
July 12
200 July 21
a. Complete the materials issuances and balances for the wire cable subsidiary ledger under FIFO.
b. Determine the balance of wire cable at the end of July.
c. Journalize the summary entry to transfer materials to work in process.
d. Explain how the materials ledger might be used as an aid in maintaining inventory quantities on hand.
Answer:
a.
RECEIVED ISSUED BALANCE
Receiving
Report
Number Quantity
Unit
Price
Materials
Requisition
Number Quantity Amount Date Quantity
Unit
Price Amount
July 1 300 $18.00 $5,400
31 200 $20 July 2 300 $18.00 5,400
200 $20.00 4,000
106 320 $5,800* July 6 180 $20.00 3,600
37 140 32 July 12 180 $20.00 3,600
140 $32.00 4,480
115 200 4,240** July 21 120 $32.00 3,840
* July 6 issuance 300 at $18.00 $5,400
20 at $20.00 400
$5,800
** July 21 issuance 180 at $20.00 $3,600
20 at $32.00 640
$4,240
b. Ending wire cable balance:
120 at $32.00……………………………………………………………………
$3,840
c.
Work in Process ($5,800 + $4,240) 10,040
Materials 10,040
d. Comparing quantities on hand as reported in the materials ledger with predetermined order points enables management to order materials before a lack of materials causes idle time. Also, the subsidiary ledger can include columns for recording quantities ordered, so that management can have easy access to information about materials on order.