Question

During the current month, Blossom Company incurs the following manufacturing costs.

(a)		Purchased raw materials of $17,000 on account.
(b)		Incurred factory labor of $38,000. Of that amount, $29,000 relates to wages payable and $9,000 relates to payroll taxes payable.
(c)		Factory utilities of $3,000 are payable, prepaid factory property taxes of $2,500 have expired, and depreciation on the factory building is $8,000.

Prepare journal entries for each type of manufacturing cost. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

No.	Account Titles and Explanation	Debit	Credit
(a)
	(Purchases of raw materials on account)
(b)
	(To record factory labor costs)
(c)
	(To record overhead costs)

Answer 1

No	Account	Debit	Credit
A	Raw materials inventory	17,000
	Accounts Payable		17,000
B	Factory labor	38,000
	Factory wages payable		29,000
	Employer payroll taxes payable		9,000
C	manufacturing overhead	13,500
	Prepaid factory property taxes		2500
	Accumulated Depreciation - Buildings		8000
	Utilities payable		3000

Answer 2

During the month of July, Zeem Company incurred the following manufacturing costs:

1.	Purchased raw materials of $ 8,720 on account.
2.	Incurred factory labour of $ 27,600 and payroll taxes of $ 3,800.
3.	Factory utilities of $ 4,200 are payable, and depreciation on the factory building is $ 6,480.

Prepare journal entries for each type of manufacturing cost.