BACK Exercise 20-7 Crawford Corporation incurred the following transactions. 1.

Question

BACK Exercise 20-7 Crawford Corporation incurred the following transactions. 1. Purchased raw materials on account $49,100. 2. Raw Materials of $44,200 were requisitioned to the factory. An analysis of the materials requisition slips indicated that $9,900 was classified as indirect materials. 3. Factory labor costs incurred were $61,900, of which $51,400 pertained to factory wages payable and $10,500 pertained to employer payrol axes 4. Time tickets indicated that $55,300 was direct labor and $6,600 was indirect labor 5. Manufacturing overhead costs incurred on account were $81,900 6. Depreciation on the company's office building was $8,500. Manufacturing overhead was applied at the rate of 160% of direct labor cost. Goods costing $93,900 were completed and transferred to finished goods. Finished goods costing $76,400 to manufacture were sold on account for $105,700. 7. 8. 9.

Explanation / Answer

SOLUTION:

Debit Credit 1 Materials Inventory 49,100 Accounts Payable 49,100 2 Work in Process Inventory 34,300 Manufacturing Overhead 9,900 Raw Materials Inventory 44,200 3 Factory Labor 61,900 Factory Wages Payable 51,400 Employer Payroll Taxes Payable 10,500 4 Work in Process Inventory 55,300 Manufacturing Overhead 6,600 Factory Labor 61,900 5 Manufacturing Overhead 81,900 Accounts Payable 81,900 6 Depreciation Expense 8,500 Accumulated Depreciation-Buildings 8,500 7 Work in Process Inventory 88,480 Manufacturing Overhead 88,480 (55,300*160%) 8 Finished Goods Inventory 93,900 Work in Process Inventory 93,900 9 Accounts Receivable 105,700 Sales Revenue 105,700 Cost of Goods Sold 76,400 Finished Goods Inventory 76,400

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