Question

Enter the following entries for the month of July.

A. Cash sales of inventory: $800. The cost of inventory sold was $350.

B. Selling and Administrative expenses incurred and paid: $1,200.

C. Raw Materials purchased on account: $2,560.

D. Materials requisitioned and used in production: $980.

E. Direct Labor wages incurred during July: $2,875. Direct Labor wages actually paid in July were $2,000.

F. Factory Overhead was allocated to Work in Process Inventory at a predetermined overhead allocation rate of 60% of Direct Labor costs incurred during July.

G. The cost of product completed and moved to the Finished Goods Inventory: $4,675.

H. Sales on account: $2,000. The cost of the units sold was $975.

I. Actual Factory Overhead costs for the month of July totaled $2,600. (All paid in cash.)

What would the Journal Entries look like?

Answer 1

Credit Debit $ 800 Accounts tittle Cash Sales revenue (Sales of inventory) $ 800 $ 350 Cost of goods sold Finished goods inventory (Sales of inventory) $ 350 $ 1.200 $ 1.200 Selling and administration expenses Cash (Being Selling and administration expenses paid) $ 2,560 Raw materials Inventory Accounts payable (Raw material purchased) $ 2,560 $ 980 Work in progress-Inventory Raw materials Inventory (Raw material Consumed) 980 $ 2,875 Wages expense Wages payable Cash (Wages expenses incurred and paid) $ $ 875 2,000 $ 1,725 Work in progress-Inventory Manufacturing overhead (Manufacturing overhead allocated) 2875*60% 1,725 B $ $ 4,675 Finished goods inventory Work in progress-Inventory (Finshed inventory produced) $ 4,675 $ 2,000 Accounts receivables Sales revenue (Sales of inventory) $ 2,000 $ 975 Cost of goods sold Finished goods inventory (Sales of inventory) $ 975 $ 2,600 Manufacturing overhead Cash (Manufacturing overhead paid) $ 2,600 $ 875 Cost of goods sold Manufacturing overhead (Under applied overhead) $ 875 | Applied - Actual ) A-B