Forest Components makes aircraft parts. The followingtransactions occurred in July: Purchased $16,950 of materials onaccount. Issued $16,860 in direct materials to the productiondepartment. Issued $1,350 of supplies from the materials inventory.Paid for the materials purchased in transaction (1) using cash.Returned $2,010 of the materials issued to production in (2) to thematerials inventory. Direct labor employees earned $31,000, whichwas paid in cash. Paid $17,270 for miscellaneous items for themanufacturing plant. Accounts Payable was credited. Recognizeddepreciation on manufacturing plant of $36,900. Appliedmanufacturing overhead for the month. Forest uses normal costing.It applies overhead on the basis of direct labor costs using anannual, predetermined rate. At the beginning of the year,management estimated that direct labor costs for the year would be$434,900. Estimated overhead for the year was $391,410. Thefollowing balances appeared in the inventory accounts of ForestComponents for July: Beginning Ending Materials Inventory ? $12,510 Work-in-Process Inventory ? 10,660 Finished Goods Inventory$ 2,700 7,070 Cost of Goods Sold ? 74,400 Required: a. Preparejournal entries to record these transactions. (If no entry isrequired for a transaction/event, select "No journal entryrequired" in the first account field.) b. Prepare T-accounts toshow the flow of costs during the period from Materials Inventorythrough Cost of Goods Sold.
