The gross earnings of the factory workers for Larkin Company during the month of

Question

The gross earnings of the factory workers for Larkin Company during the month of January are $90,000. The employer’s payroll taxes for the factory payroll are $9,300. The fringe benefits to be paid by the employer on this payroll are $5,300. Of the total accumulated cost of factory labor, 80% is related to direct labor and 20% is attributable to indirect labor. (a) Prepare the entry to record the factory labor costs for the month of January. (b) Prepare the entry to assign factory labor to production.

Explanation / Answer

(a)

(b)

General Journal Debit Credit Factory Labor $104,600 Factory Wages Payable $90,000 Employer Payroll Taxes Payable $9,300 Employer Fringe Benefits Payable $5,300

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