8. Journalize the following transactions for Malone Custom Furniture Manufacturi

Question

8. Journalize the following transactions for Malone Custom Furniture Manufacturing (omit explanations) a. Incurred and paid advertising expenses, $3,500. b Incurred manufacturing wages of$30,000, 60% of which was direct labor and 40% of which was indirect labor. Wages will be paid at a later date. c. Purchased raw materials on account, $27,000 d. Used in production: direct materials, $12,000; indirect materials, $5,500 e. Recorded manufacturing overhead: depreciation on plant, $14,000; plant insurance (previously paid) $1,800, plant property tax, $4,500 (credit Property Tax Payable). f. Allocated manufacturing overhead tojobs, 150% of direct labor costs. g. Completed production on jobs with costs of $55,000. h. Sold inventory on account, $64,000, cost of goods sold, $35,000. The company uses the perpetual inventory system.

Explanation / Answer

a Advertising exp 3500 to Cash 3500 b Direct Labour 18000 (30000*60%) Indirect Labour 12000 (30000*40%) to Wages Payable 30000 c Inventory (RM) 27000 to Creditors 27000 d work in progress 12000 Manufacturing O/H (Ind Mat) 5500 to Inventory (RM) 17500 e Manufacturing O/H (Dep) 14000 to Plant 14000 Manufacturing O/H (Ins) 1800 to Prepaid Insurance 1800 Manufacturing O/H (Tax) 4500 to Property tax Payable 4500 f work in progress 27000 (18000*150%) to Manufacturing o/h 27000 g Finished goods 55000 Work in progress 55000 h Receivables 64000 to Sales Revenue 64000 COGS 35000 to Finished goods 35000

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