The gross earnings of the factory workers for Larkin Company during the month of
ID: 2518452 • Letter: T
Question
The gross earnings of the factory workers for Larkin Company during the month of January are $76,000. The employer's payroll taxes for the factory payroll are $8,000. The fringe benefits to be paid by the employer on this payroll are $6,000. Of the total accumulated cost of factory labor, 85% is related to direct labor and 15% is attributable to indirect labor.
Instructions
(a) Prepare the entry to record the factory labor costs for the month of January.
(b) Prepare the entry to assign factory labor to production.
Explanation / Answer
(a) The entry to record the factory labor costs for the month of January will be prepared as follows:
(b) The entry to assign factory labor to production will be prepared as follows:
Account Titles and Explanation Debit Credit Factory Labor (76,000 + 8,000 + 6,000) 90000 Factory Wages Payable 76000 Employer Payroll Taxes Payable 8000 Employer Fringe Benefits Payable 6000Related Questions
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