The following transactions occurred in January at Dungan Cabinetry, a furniture

Question

The following transactions occurred in January at Dungan Cabinetry, a furniture maker that uses job costing 1. Purchased $54,300 in materials on account 2. Issued $2,100 in supplies from the materials inventory to the production department 3. Paid for the materials purchased in (1). 4 Issued $26,100 in direct materials to the production department 5 Incurred wage costs of $48,000, which were debited to Payroll, a temporary account. Of this amount, $14,100 was withheld for payroll taxes and credited to Payroll Taxes Payable. The remaining $33,900 (6) and (7) for additional information about Payroll 6. Recognized $27,000 in fringe benefit costs, incurred as a result of the wages paid in (5). This $27,000 7. Analyzed the Payroll account and determined that 60 percent represented direct labor, 30 percent was paid in cash to the employees. See transactions was debited to Payroll and credited to Fringe Benefits Payable indirect manufacturing labor, and 10 percent, administrative and marketing costs. 8. Paid for utilities, power, equipment maintenance, and other miscellaneous items for the manufacturing plant totaling $33,000 9. Applied overhead on the basis of 160 percent of direct labor costs 10 Recognized depreciation of $17,850 on manufacturing property, plant, and equipment. Required: (a)Prepare journal entries to record these transactions. (If no entry is required for a transaction/event, select "No j required" in the first account field.) View transaction list Journal entry worksheet 10 Record material purchases of $54,300 on account. tudy341

Explanation / Answer

S.NO. ACCOUNTS TITLES AND EXPLANATIONS DEBIT IN $ CREDIT IN $ 1 Raw material Inventory Dr. 54,300    Accounts payable 54,300 (For raw material purchased) 2 Manufacturing overheads Account Dr. 2,100    Raw material Inventory Account 2100 (for raw material issued as suppplies) 3 Accounts payable Dr. 54,300      Cash Account 54,300 (for payment made to Accounts payble) 4 Work in process inventory Dr. 26100     Raw material Account 26100 (for direct material issued) 5 Payroll Aaccount Dr. 48000      Cash Account 33900      Payroll taxes payable 14100 (for payment of wages made) 6 Payroll Account Dr. 27000      Fringe benefit payable Account 27000 (for fringe benefits payable) 7 Work in process Account Dr. 45000 Manufacturing Overheads Dr. 22500 Selling and Admin Overheads Dr. 7500     Payroll Account 75000 (for allocating the payroll) 8 Manufacturing overheads Dr. 33000     Cash 33000 (for utilities, other cost incurred) 9 Work in process Account Dr. 72000     Manufacturing overheads Account 72000 (for overhads applied at 160% of $45000) 10 Manufacturing overheads Dr. 17850     Accumulated Depreciation-PPE 17850 (for depreciation charged)

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