Question

Expand Your Critical Thinking 15-02 al-a4 In the course of routine checking of all journal entries prior to preparing year-end reports, Betty Eller discovered several strange entries. She recalled that the president's son Joe had come in to help out during an especially busy time and that he had recorded some journal entries. She was relieved that there were only a few of his entries, and even more relieved that he had included rather lengthy explanations. The entries Joe made were: (1) Work in Process Inventory 22,000 Cash 22,000 (This is for materials put into process. I don't find the record that we paid for these, So I'm crediting Cash because I know we'll have to pay for them sooner or later.) Manufacturing Overhead 9,500 Cash 9,500 (This is for bonuses paid to salespeople. I know they're part of overhead, and I can't find an account called "Non-Factory Overhead" or "Other Overhead" so I'm putting it in Manufacturing Overhead. I have the check stubs, so I know we paid these.) (3) Wages Expense 106,000 Cash 106,000 (This is for the factory workers' wages. I have a note that employer payroll taxes are $15,900. I still think that's part of wages expense and that we'll have to pay it all in cash sooner or later, so I credited Cash for the wages and the taxes. (4) Work in Process Inventory 2,000 Raw Materials Inventory 2,000 (This is for the glue used in the factory. I know we used this to make the products, even though we didn't use very much on any one of the products. I got it out of inventory, so I credited an inventory account.)

Answer 1

Journal Entries:
Date/Event	Accounts Title	Debit $	Credit $
1	Work in Process Inventory	22000
	Raw Material Inventory		22000
	(being Raw material put into process)
2	Selling expenses-Bonuses	9500
	Cash		9500
	(being bonus selling expenses paid to salespeople)
3	Factory wages	90100
	Employer wages expenses	15900
	Factory wages payable		106000
	(being factory labor wages and taxes made payable)
4	Manufacturing Overhead	2000
	Raw Materials Inventory		2000
	(being glue used for the factory purpose)