09. Pass the following necessary journal entries for Ahmed Furniture\" a. Raw ma

Question

09. Pass the following necessary journal entries for Ahmed Furniture" a. Raw material purchases are recorded in an inventory account $40,000. b. Direct materials $10,000 issued to a job increase Work in Process and decrease Raw Materials. Indirect materials $5,000 used are charged to Manufacturing Overhead and also decrease Raw Materials The cost of direct labor $3,000 incurred increases Work in Process and the cost of indirect labor $ 2,000 increases Manufacturing Overhead c. d. Work in Process is increased when Manufacturing Overhead is applied to jobs. e. Nonmanufacturing costs (advertising expenses $ 1,000) are charged to expense as they f. As jobs are completed, the Cost of Goods Manufactured is transferred to Finished g. When finished goods are sold, two entries are required: (1) to record the sale $2000; & are incurred Goods $3000 approximately from Work in Process (2) to record COGS $1500 and reduce Finished Goods

Explanation / Answer

a) Raw Material Inventory        dr     $40000

To Accounts Payable $40000

b) Work in progress Inventory        dr     $10000

Manufacturing Overhead dr $5000

To Raw Material Inventory $15000

c) Work in progress Inventory        dr     $3000

Manufacturing Overhead dr $2000

To Salary Payable $5000

d) Work in progress Inventory        dr     $7000

To Manufacturing Overhead $7000

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