On August 1, Shead Corporation had $34,400 of raw materials on hand. During the

Question

On August 1, Shead Corporation had $34,400 of raw materials on hand. During the month, the company purchased an additional $77,700 of raw materials. During August, $79,400 of raw materials were requisitioned from the storeroom for use in production. These raw materials included both direct and indirect materials. The indirect materials totaled $6,000. Prepare journal entries to record these events. Use those journal entries to answer the following questions: The credits to the Raw Materials account for the month of August total:

On August 1, Shead Corporation had $34,400 of raw materials on hand. During the month, the company purchased an additional $77,700 of raw materials. During August, $79,400 of raw materials were requisitioned from the storeroom for use in production. These raw materials included both direct and indirect materials. The indirect materials totaled $6,000. Prepare journal entries to record these events. Use those journal entries to answer the following questions: The credits to the Raw Materials account for the month of August total:

Explanation / Answer

Journal Entries:

Debit Raw Materials $77700

Credit Accounts Payable $77700

(Purchases of raw materials)

Debit Work in Process Inventory $73400

Debit Manufacturing Overhead $6000

Credit Raw Materials $79400

(issuance of raw materials)

The credits to the Raw Materials account for the month of August total: $79400

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