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 $4,970 on account, factory labor $6,240 of which $5,350 relates to factory wages payable and $890 relates to payroll taxes payable, and utilities payable $2,810. 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

Account Titles and Explaination Debit Credit January 31 Direct Material Cost A/c 4970 To Raw Material inventory 4970 (being amount of raw material consumed) January 31 Direct Labour A/c 6240 To Wages Payable 5350 TO Payroll Taxes Payable 890 (being amount of Direct Wages and tax thereon payable) January 31 Manufactring Overhead A/c 2810 TO Utilities Payable 2810 (being amount of utilities payable)

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