Question

1. A selected list of accounts used by Firenze Flooring follows: Cash Accounts Receivable Raw Materials Inventory Work In Process Inventory Finished Goods Inventory Accounts or Wages Payable Factory Labor Manufacturing Overhead Cost of Goods Sold Sales Revenue Firenze Flooring uses a job order system and maintains perpetual inventory records. Instructions: Place the appropriate account in the columns indicating the appropriate account(s) to be debited and credited for the transactions listed below Transaction Account(s) Debited Account(s) Credited a) Raw materials were purchased on account b) Factory labor was incurred and is due to employees c) Direct materials were issued to Work in Process d) Paid for raw materials purchased previously on account. e) Raw materials were issued to the production facility to be used indirectly during the production process f) Recognized direct labor and supervisor salaries used g) Overhead cost was applied to production based on a predetermined overhead rate of $8 per labor hour. h) Production that was completed and transferred to Finished Goods Goods with a production cost of $80,000 were sold for $105,000 on account. (Hint: There will be two accounts debited and two accounts credited i)

Answer 1

Answer:

Transaction	Account(s) Debited	Account(s) Credited
a) Raw materials were purchased on account.	Raw Materials Inventory	Accounts or Wages Payable
b) Factory labor was incurred and is due to employees	Factory Labor	Accounts or Wages Payable
c) Direct materials were issued to Work in Process	Work In Process Inventory	Raw Materials Inventory
d) Paid for raw materials purchased previously on account.	Accounts or Wages Payable	Cash
e) Raw materials were issued to the production facility to be used indirectly during the production process	Manufacturing Overhead	Raw Materials Inventory
f) Recognized direct labor and supervisor salaries used	Work In Process Inventory	Factory Labor
g) Overhead cost was applied to production based on a predetermined overhead rate of $8 per labor hour.	Work In Process Inventory	Manufacturing Overhead
h) Production that was completed and transferred to Finished Goods	Finished Goods Inventory	Work In Process Inventory
i) Goods with a production cost of $80,000 were sold for $105,000 on account. (Hint: There will be two accounts debited and two accounts credited)	Accounts Receivable and Cost of Goods Sold	Sales Revenue and Finished Goods Inventory