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Howie Stars produces starts for elementary teachers to reward their students. Howie Stars' trial balance on June 1 follows:
HOWIE STARS Trial Balance June 1, 2012
			Balance
		Account Title	Debit	Credit
		Cash	$14,000
		Accounts receivable	155,000
		Inventories:
		Materials	5,700
		Work in process	39,400
		Finished goods	20,400
		Plant assets	200,000
		Accumulated depreciation		$72,000
		Accounts payable		127,000
		Wages payable		1,700
		Common stock		142,000
		Retained earnings		91,800
		Sales revenue
		Cost of goods sold
		Manufacturing overhead
		Marketing and general expenses
		Total	$434,500	434,500
June 1 balances in the subsidiary ledgers were as follows:
Materials subledger: Paper, $4,700; indirect materials, $1,000
Work in process subledger: Job 120, $39,400; $0 for Job 121
Finished goods subledger: Large Stars, $9,400; Small Stars, $11,000
June transactions are summarized as follows:
a. Collections on account, $152,000.
b. Marketing and general expenses incurred and paid, $28,000.
c. Payments on account, $36,000.
d. Materials purchases on credit: Paper, $22,900; indirect materials, $3,800.
e. Materials used in production (requisitioned): Job 120: paper , $850 Job 121: paper, $7,650 Indirect materials, $1,000
f. Wages incurred and assigned during June, $35,000. Labor time records for the month: Job 120, $3,500; Job 121, $16,600; indirect labor, $14,900.
g. Wages paid in June include the balance in the Wages payable account at May 31 and $32,200 of wages incurred during June.
h. Depreciation on plant and equipment, $2,600.
i. Manufacturing overhead was allocated at the predetermined rate of 50% of direct labor cost.
j. Jobs completed during the month: Job 120, 300,000 Large Stars at total cost of $45,500.
k. Credit sales on account: all of Job 120 for $111,000.
l. Closed the Manufacturing overhead account to Cost of goods sold.
Requirements:
1. Journalize the transactions for the company. Howie uses a perpetual inventory system.
2. Open T-accounts for the general ledger, the Materials ledger, the Work in process ledger, and the Finished goods ledger. Insert each account balance as given, and use the reference Bal. Post the journal entries to the T-accounts using the transaction letters as a reference.
3. Prepare a trial balance at June 30, 2012.
4. Use the Work in process inventory T-account to prepare a schedule of cost of goods manufactured for the month of June.
5. Prepare an income statement for the month of June. Requirement 1 Journal Entry ITEM ACCOUNTS AND EXPLANATIONS POST. DEBIT CREDIT REF. Jun 30 a. b. c. d. e. f. g. h. i. j. k1. k2. l. Requirement 2 Scroll way down for all accounts Cash Accounts receivable Bal Bal Bal Bal Materials inventory Work in process inventory Bal Bal Bal Bal Finished goods inventory Plant assets Bal Bal Bal Bal Accumulated depreciation Accounts payable Bal Bal Bal Bal Wages payable Common stock Bal Bal Bal Bal Retained earnings Sales revenue Bal Bal Bal Cost of goods sold Bal Manufacturing overhead Marketing and general expenses Bal Bal Materials inventory ledger: Paper Indirect materials Bal Bal Bal Bal Work in process ledger: Job 120 Job 121 Bal Bal Bal Bal Finished goods ledger: Large stars Small stars Bal Bal Bal Bal

Requirement 3
Howie Stars
Trial Balance
30-Jun-10
ACCOUNT	DEBIT	CREDIT
Cash
Accounts receivable
Inventories:
Materials
Work in process
Finished goods
Plant assets
Accumulated depreciation
Accounts payable
Wages payable
Common stock
Retained earnings
Sales revenue
Cost of goods sold
Marketing and general expenses
Total

Requirement 4
Howie Stars
Schedule of Cost of Goods Manufactured
Month Ended June 30, 2010
Beginning work in process inventory
Direct materials used
Direct labor
Manufacturing overhead allocated
Total manufacturing costs incurred
during the month
Total manufacturing costs to account for
Ending work in process inventory
Cost of goods manufactured Requirement 5 Howie Stars Income Statement Month Ended June 30, 2010 Sales revenue Cost of goods sold: Beginning finished goods inventory Cost of goods manufactured Cost of goods available for sale Ending finished goods inventory Unadjusted cost of goods sold Underallocated manufacturing overhead Adjusted cost of goods sold Gross profit Marketing and general expenses Operating income

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