Question

Part c TMZ manufactures flags. The following information relates to January 2018. Raw materials of $100 000were used in the manufacturing process during January. Factory wages for January paid in cash $200 000 Electricity for January paid in cash $80 000 (only 80% relates to the factory) Depreciation on factory machines $40 000- 70% of the time this machinery was used in producing inventory whereas 30% of the time it was standing idle. Depreciation on office equipment $10 000 -25%of the office equipment is used by factory administration staff and 75% is used by the head office administration staff. Required: Journalise the above information. (6).

Answer 1

Debit S Credits Journal entries :- Date Accounts Title & Explanation Jan-18 Work in progress To Raw materials (Entry for Raw material used in manufacturing process) 100,000 100,000 Jan-18 200,000 Wages expense To Cash (Entry for factory wages paid) 200,000 Jan-18 64,000 16,000 Factory overhead (80000*80%) Electricity expense (80000*20%) To Cash (Entry for electricity paid) Jan-18 28,000 12,000 Factory overhead (40000*70%) Depreciation expense - Machinery (40000430%) To Accumulated depreciation - Factory machinery (Entry for depreciation expenses on Factory machinery) 40,000 Jan-18 2,500 7,500 Factory overhead (10000*25%) Depreciation expense - Office equipment (10000*75%) To Accumulated depreciation - Office equipment (Entry for depreciation expenses on Office equipment) 10,000