Question

4. (8 POINTS) A car manufacturer produces custom order cars and uses job order costing. What were the Journal entries that the company made to record each of the following activities? a) On January 1st, $20,000 of raw materials were purchased on credit. b) On January 15th, $1,000 of raw materials were requisitioned for use as direct materials and $5,000 were requisitioned for indirect materials. c) On January 30th, $5,000 of indirect production labor costs were incurred along with $8,000 of direct labor costs. d) On January 31st, $4,000 of inventory was finally completed and became available to be sold to customers (but still hasn't been sold).

Answer 1

Date	Accounts Tittle and Explanation	Debit	Credit
Jan 1	Raw Materials Inventory	$20,000
	Accounts Payable		$20,000
	(To record materials purchases)
Jan 15	Work in Process Inventory	$1,000
	Factory Overhead	$5,000
	Raw Materials Inventory		$6,000
	(To record materials put into production)
Jan 30	Work in Process Inventory	$8,000
	Factory Overhead	$5,000
	Factory Payroll		$13,000
	(To record labor put into production)
Jan 31	Finished Goods Inventory	$4,000
	Work in Process Inventory		$4,000