Question

Prepare the entries for the following transactions.

1. Purchased $119,000 of raw materials on account.
2. Issued $8,400 of supplies from the materials inventory
3. Labor was incurred as follows:
   • Direct labor of $217,000
   • Indirect labor of $300,000
   • Accountants salaries $100,000
4. Recorded depreciation as follows:
   • On computer used by line manager in plant of $10,000
   • On computer used by the accountant $5,000
5. Allocated Manufacturing overhead in the amount of $500,000erm

Answer 1

1]	Raw materials inventory	$ 119,000
	Accounts payable		$ 119,000
	[Raw material purchases on account]
2]	WIP inventory	$             8,400
	Raw material inventory		$           8,400
	[Issue of raw materials for production]
3]	WIP Inventory	$         217,000
	Manufacturing overhead	$         300,000
	Administrative salaries	$         100,000
	Salaries and wages payable		$ 617,000
	[Salaries incurred]
4]	Manufacturing overhead	$           10,000
	Accumulated depreciation-Plant computer		$         10,000
	[Depreciation on computer used in plant]
5]	Depreciation expense--Office computer	$             5,000
	Accumulated depreciation-Office computer		$           5,000
	[Depreciation on office computer]
6]	WIP inventory	$         500,000
	Manufacturing overhead		$ 500,000
	[Manufacturing overhead allocated]