Exercise 16-4 Schrager Company has two production departments: Cutting and Assem

Question

Exercise 16-4 Schrager Company has two production departments: Cutting and Assembly. July 1 inventories are Raw Materials $,200, Work in Process-Cutting $2,900, Work in Process-Assembly $10,600, d inished Goods $31,000. Ding Juy, the following transactions 1. Purchased $62,500 of raw materials on account. 2. Incurred $60,000 of factory labor. (Credit Wages Payable.) 3. Incurred $70,000 of manufacturing overhead; $40,000 was paid and the ramainder is unpaid 4. Requisitioned materials for Cutting $15,700 and Assembly $8,900 S. Used factory labor for Cutting $33,000 and Assembly $27,000 6. Applied overhead at the rate of $18 per machine hour. Machine hours were Cutting 1,680 and Assembly 1,720 7. Transferred goods costing $67,600 from the Cutting Department to the Assambly Department. 8. Transferred goods costing $134,900 from Assemibly to Finished Goods. 9. Sold goods costing $150,000 for $200,000 on account. ournalize the transactions. (Credit account titles are automatically indented when·mount is entered. Do not indent manually.)

Explanation / Answer

Journal entry :

No account and explanation Debit credit 1 Raw material 65200 Account payable 65200 2 Factory labour 60000 Wages payable 60000 3 Manufacturing overhead 70000 Cash 40000 Account payable 30000 4 Work in process-Cutting 15700 Work in process-assembly 8900 Raw material 24600 5 Work in process-Cutting 33000 Work in process-assembly 27000 Factory labour 60000 6 Work in process-Cutting (1680*18) 30240 Work in process-Assembly (1720*18) 30960 Manufacturing overhead 61200 7 Work in process-assembly 67600 Work in process-Cutting 67600 8 Finished goods 134900   Work in process-assembly 134900 9 Account receivable 200000 Sales 200000 (To record sales) Cost of goods sold 150000 Finished goods 150000 (To record cost of goods sold)

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