Question

Use the following information to answer questions [The following information applies to the questions displayed below.] The following information is available for Lock-Tite Company, which produces special-order security products and uses a job order costing system. April 30 May 31 Inventories Raw materials $ 47,000 $ 57,000 Work in process 9,600 19,200 Finished goods 55,000 33,800 Activities and information for May Raw materials purchases (paid with cash) 191,000 Factory payroll (paid with cash) 250,000 Factory overhead Indirect materials 11,000 Indirect labor 57,500 Other overhead costs 96,000 Sales (received in cash) 1,600,000 Predetermined overhead rate based on direct labor cost 55 % Exercise 15-8 Journal entries for materials LO P1 Raw materials purchases for cash. Direct materials usage. Indirect materials usage. Prepare journal entries for the above transactions for the month of May.

Answer 1

Date Account Titles & Explanation Debit Credit Remarks and Workings 1)Raw Materials Inventory 2) Work in Process Inventory 3) Work in Process Inventory 4) Factory Overhead $191,000 $181,000 $250,000 $68,500 $191,000 $181,000 $250,000 $11,000 Cash To record raw materials purchase paid with cash) ($47,000 $191,000 $57,000) To record direct materials used in production) Raw Materials Invento Cash To record Factory payroll paid with cash) Raw Materials Inventory Wages Payable $57,500 To record indirect materials and indirect labor costs 5) Factory Overhead 6) Cash 7) Work in Process Inventory $96,000 $1,600,000 $137,500 Accounts Payable $96,000 To record Other factory overhead costs incurred) Sales revenue $1,600,000(To record sale for cash $255,000 x 55% (Ref: Entry # 2 for direct labor cost) To record factory overhead applied to the production ) Manufacturing overhead $137,500