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Potter Company has installed a JIT purchasing and manufacturing system and is using backflush accounting for its cost flows

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Potter Company has installed a JIT purchasing and manufacturing system and is using backflush accounting for its cost flows. It currently uses a two-trigger approach with the purchase of materials as the first trigger point and the completion of goods as the second trigger point. During the month of June, Potter had the following transactions: Raw materials purchased $244,000 Direct labor cost 40,500 Overhead cost 202,500 Conversion cost applied 263,250" *$40,500 labor plus $222,750 overhead. There were no beginning or ending inventories. All goods produced were sold with a 60 percent markup. Any variance is closed to Cost of Goods Sold. (Variances are recognized monthly.) Required: 1. Prepare the journal entries for the month of May using backflush costing, assuming that Potter uses the completion of goods as the only trigger point. For a compound transaction, if an amount box does not require an entry, leave it blank. Prepare your entries in the following order: (a) completion of goods, (b) cost of sales, (c) sales revenue, and (d) recognition of the variance between applied and actual production costs. a. II II II III 10 III III II II II b. C. d. 2. Prepare the journal entries for the month of May using backflush costing, assuming that Potter uses the sale of goods as the only trigger point. For a compound transaction, if an amount box does not require an entry, leave it blank. Prepare your entries in the following order: (a) completion and sale of goods, (b) revenue from sales, and (c) recognition of the variance between applied and actual production costs. a b. 11 II I. IlI II II C. Accounts Payable Accounts Receivable Conversion Cost Control Cost of Goods Sold Finished Goods Inventory Sales Revenue Wages Payable Accounts Receivable Conversion Cost Control Cost of Goods Sold Finished Goods Inventory Sales Revenue Wages Payable Accounts Payable Accounts Receivable Cost of Goods Sold Finished Goods Inventory Sales Revenue