Question

Exercise 3-1 Prepare Journal Entries [LO3-1]

Larned Corporation recorded the following transactions for the just completed month.

a. $ 80,000 in raw materials were purchased on account.

b. $ 71,000 in raw materials were used in production. Of this amount, $ 62,000 was for direct materials and the remainder was for indirect materials.

c. Total labor wages of $ 112,000 were paid in cash. Of this amount, $ 101,000 was for direct labor and the remainder was for indirect labor.

d. Depreciation of $ 175,000 was incurred on factory equipment.

Required:

Record the above transactions in journal entries. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Answer 1

Journal entry

No	General Journal	Debit	Credit
1	Raw material	80000
	Account payable		80000
	(To record purchase raw material)
2	Work in process	62000
	Manufacturing overhead	9000
	Raw material		71000
	(To record material used)
3	Work in process	101000
	Manufacturing overhead	11000
	Cash		112000
	(To record labor)
4	Manufacturing overhead	175000
	Accumulated depreciation-equipment		175000
	(To record overhead)