Question

Required information Use the following information to answer questions (The following information applies to the questions displayed below.) The following information is available for Lock-Tite Company, which produces special-order security products and uses a job order costing system. April 30 May 31 Inventories Raw materials $46,000 9,500 55,000 42,000 18,200 33,700 Work in process Finished goods Activities and information for May Raw materials purchases (paid with cash) Factory payroll (paid with cash) Factory overhead Indirect materials 188,000 200,000 16,000 46,000 95,500 1,100,000 558 Indirect labor Other overhead costs Sales (received in cash) Predetermined overhead rate based on direct labor cost Exercise 15-8 Journal entries for materials LO P1 1. Raw materials purchases for cash. 2. Direct materials usage. 3. Indirect materials usage. Prepare journal entries for the above transactions for the month of May.

Answer 1

1.Raw materials purchases for cash.

Transaction	General Journal	Debit	Credit
1	Raw Materials Inventory A/c	188,000
	To Cash A/c		188,000
	[Journal Entry to record the Raw materials purchases for cash]

2.Direct materials usage.

Transaction	General Journal	Debit	Credit
2	Work in Process Inventory A/c	176,000
	To Raw Materials Inventory A/c		176,000
	[Journal Entry to record the Direct materials usage]

Direct materials usage = Raw materials at the beginning + Raw materials purchases – Raw materials at the end – Indirect Materials used

= $46,000 + $188,000 - $42,000 - $16,000

= $176,000

3.Indirect materials usage.

Transaction	General Journal	Debit	Credit
3	Factory Overhead A/c	16,000
	To Raw Materials Inventory A/c		16,000
	[Journal Entry to record the Indirect materials usage]