During January, its first month of operations, Knox Company accumulated the foll

Question

During January, its first month of operations, Knox Company accumulated the following manufacturing costs: raw materials $5,500 on account, factory labor $6,470 of which $5,600 relates to factory wages payable and $870 relates to payroll taxes payable, and utilities payable $2,270. Prepare separate journal entries for each type of manufacturing cost. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)

Explanation / Answer

Knox Company Journal Entry-January Account Title Dr$ Cr$ Inventory                  5,500 Accounts Payable               5,500 (Purchase or raw materials on a/c) Work In Process                  5,500 Inventory               5,500 (Raw materials issue to production) Work In Process                  6,470 Factory Wages Payable               5,600 Payroll Taxes Payable                  870 ( Recording factory labor cost) Factory Overhead Control A/C                  2,270 Utilities Payable               2,270 (recording utilities as factory Overhead)

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