Question

Larned Corporation recorded the following transactions for the just completed month. a. $86,000 in raw materials were purchased on account. b. $84.000 in raw materials were used in production of this amount, $71,000 was for direct materials and the remainder was for indirect materials. C. Total labor wages of $116,500 were paid in cash. Of this amount, $104,000 was for direct labor and the remainder was for indirect labor d. Depreciation of $195,000 was incurred on factory equipment. Required: Record the above transactions in journal entries. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Answer 1

Journal entry are shown below
Event	General Journal	Debit	Credit
a	Raw material inventory	$86,000
	Accounts payable		$86,000
	(To record raw material purchased on account)
Raw material purchased would increase inventory and liability would increase as material is purchased on account
Event	General Journal	Debit	Credit
b	Work in process inventory	$71,000
	Manufacturing overhead (84,000-71,000)	$13,000
	Raw material inventory		$84,000
	(To record raw material used in production)
Event	General Journal	Debit	Credit
c	Work in process inventory	$104,000
	Manufacturing overhead (116,500-104,000)	$12,500
	Wages payable		$116,500
	(To record labor costs incurred)
Event	General Journal	Debit	Credit
d	Manufacturing overhead	$195,000
	Accumulated depreciation - Factory equipment		$195,000
	(To record depreciation incurred on factory equipment)