Tough Hardware Purchases Raw Materials and Processes Those Purchases Through

question 167

Essay

Tough Hardware purchases raw materials and processes those purchases through a receiving/inspection process prior to stocking for production. Tough places three purchase orders for materials for production and receives the goods that day. The first purchase order is for 2,500 1/2" × 96" milling blanks at $2.75 each. The second is for 4,000 pieces of 48" × 96" × 1" sheet steel at $15.55 each. The third purchase order is for five 5-gallon drums of milling lubrication oil at $475.00 per barrel.?

The receiving/inspection process is completed and the goods are transferred from Receiving Inventory to Raw Materials. The Receiving/Inspection Department assigns manufacturing overhead of $55.00 per purchase order as well as $2.75 per piece on metal goods and $35.00 per container on fluids. All labor is allocated through overhead.

(a) Prepare the journal entry to purchase and receive these items to Receiving Inventory on account.
(b) Assign overhead to the metal goods.
(c) Assign overhead to the fluid goods.
(d) Transfer all goods to Raw Materials Inventory.

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Definitions:

Jury

A group of people selected to decide a verdict in a legal case based on evidence presented to them in court.

Force Or Fear

A condition where actions are taken or decisions made under the pressure of threats, coercion, or actual physical force.

Robbery

The crime of taking or attempting to take anything of value by force, threat of force, or by putting the victim in fear.

Ground

The basis or reason for an action, belief, or assertion.