Purchased raw materials on account $46,300. 2. Raw Materials of $36,000 were req

Question

Purchased raw materials on account $46,300. 2. Raw Materials of $36,000 were requisitioned to the factory. An analysis of the materials requisition slips indicated that $6,800 was classified as indirect materials. 3. Factory labor costs incurred were $59,900, of which $51,000 pertained to factory wages payable and $8,900 pertained to employer payroll taxes payable. 4. Time tickets indicated that $54,000 was direct labor and $5,900 was indirect labor. 5. Manufacturing overhead costs incurred on account were $80,500. 6. Depreciation on the company’s office building was $8,100. 7. Manufacturing overhead was applied at the rate of 150% of direct labor cost. 8. Goods costing $88,000 were completed and transferred to finished goods. 9. Finished goods costing $75,000 to manufacture were sold on account for $103,000. Journalize the transactions.

Explanation / Answer

Journal entries: S.no. Accounts title and explanations Debit $ Credit $ 1 Raw material Inventory Account Dr. 46300      Accounts payable account 46300 2 Work in process inventory Account Dr. 29200 Manufacturing Overheads account Dr. 6800     Raw material Inventory account 36000 3 factory Wages account Dr. 59900     Factory wages payable Account 51000      Payroll Tax payable Account 8900 4 Work in process inventory Account Dr. 54000 Manufacturing Overheads account Dr. 5900      Factory wages account 59900 5 Manufacturing overheads account Dr. 80500      Accounts payable account 80500 6 Admin Overheads account Dr. 8100     Accumulated depreciation-Office building 8100 7 Work in process inventory Account Dr. 81000     Manufacturing Overheads account (54000*150%) 81000 8 Finished Goods inventory Account Dr. 88000     Work in process invetory Account 88000 9 Accounts receivable Dr. 103000    Sales revenue 103000 Cost of goods sold Account Dr. 75000     Inventory account 75000

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