Journalize transactions for two processes . (LO 2) Schrager Company has two prod

Question

Journalize transactions for two processes.

(LO 2)

Schrager Company has two production departments: Cutting and Assembly. July 1 inventories are Raw Materials $4,200, Work in Process—Cutting $2,900, Work in Process—Assembly $10,600, and Finished Goods $31,000. During July, the following transactions occurred.

1.Purchased $62,500 of raw materials on account.

2.Incurred $60,000 of factory labor. (Credit Wages Payable.)

3.Incurred $70,000 of manufacturing overhead; $40,000 was paid and the remainder is unpaid.

4.Requisitioned materials for Cutting $15,700 and Assembly $8,900.

5.Used factory labor for Cutting $33,000 and Assembly $27,000.

6.Applied overhead at the rate of $18 per machine hour. Machine hours were Cutting 1,680 and Assembly 1,720.

7.Transferred goods costing $67,600 from the Cutting Department to the Assembly Department.

8.Transferred goods costing $134,900 from Assembly to Finished Goods.

9.Sold goods costing $150,000 for $200,000 on account.

Journalize the transactions. (Omit explanations.)

Explanation / Answer

Journal Entries of Schrager Company Date Account Titles and Explanation Debit Credit In ($) July 1 Purchases a/c            62,500 To Accounts Payable a/c             62,500 2 Factory Labour a/c            60,000 To Wages Payable a/c             60,000 3 Manufacturing Overhead a/c            70,000 To Cash a/c             40,000 Manufacturing Overhead Payable a/c             30,000 7 Assembly Department a/c            67,600 To Cutting Department a/c             67,600 8 Finished goods (Inventory) a/c          134,900 To Assembly Department a/c           134,900 9 Accounts Receivable a/c          200,000 To Sales a/c           150,000 Profit and Loss a/c             50,000

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