Question

Journal Entries Paulson Manufacturing Company uses the perpetual inventory system to account for its manufacturing inventories. The following are Paulson's transactions during July 2019: July 5 9 11 Received material costing $3,000 from a supplier. The material was purchased on account. Requisitioned $9,000 of material for use in the factory, consisting of $7,500 of direct material and $1,500 of indirect material. Recorded the factory payroll: $20,250 of direct labor and $2,250 of indirect labor. Incurred various overhead costs totaling $21,000. (Credit Accounts Payable.) Applied $30,000 of manufacturing overhead to the products being manufactured. Completed product costing $20,000 and moved it to the warehouse. Sold goods with a product cost of $4,500 on account for $7,500. 26 a. and b. Record the transactions listed above in general journal form, post relevant portions to the four T-accounts set-up below, and balance the four accounts. General Journal Date Description Debit Credit July 5 July 9 Work in process inventory July 11 Work in process inventory July 17 July 20 July 23 July 26 To record cost of goods sold. July 26

Answer 1

1.

Date	General journal	Debit	Credit
July 5	Material inventory	$3,000
	Accounts payable		$3,000
July 9	Work in process inventory	$7,500
	Manufacturing overhead	1,500
	Material inventory		$9,000
July 11	Work in process inventory	$20,250
	Manufacturing overhead	2,250
	Wages payable		$22,500
July 17	Manufacturing overhead	$21,000
	Accounts payable		$21,000
July 20	Work in process inventory	$30,000
	Manufacturing overhead		$30,000
July 23	Finished goods inventory	$20,000
	Work in process inventory		$20,000
July 26	Cost of goods sold	$4,500
	Finished goods inventory		$4,500
	(To record cost of goods sold)
	Accounts receivable	$7,500
	Sales		$7,500
	(To record sale of product)

2.

Material inventory				Finished goods inventory
Bal.	$10,500	$9,000	July 9	Bal.	$15,000	$4,500	July 26
July 5	3,000			July 23	20,000
Bal.	$4,500			Bal.	$30,500
Work in process inventory				Cost of goods sold
Bal.	$37,500	$20,000	July 23	Bal.	$45,000
July 9	7,500			July 26	4,500
July 11	20,250			Bal.	$49,500
July 20	30,000
Bal.	$75,250