Question

Sheridan Corporation incurred the following transactions. 1. Purchased raw materials on account $46,600. 2. Raw Materials of $40,800 were requisitioned to the factory. An analysis of the materials requisition slips indicated that $7,000 was classified as indirect materials. 3. Factory labor costs incurred were $60,300. 4. Time tickets indicated that $55,700 was direct labor and $4,600 was indirect labor. 5. Manufacturing overhead costs incurred on account were $83,700. 6. Manufacturing overhead was applied at the rate of 160% of direct labor cost. 7. Goods costing $89,900 were completed and transferred to finished goods. 8. Finished goods costing $80,900 to manufacture were sold.

Record the transactions. (Enter negative amounts using either a negative sign preceding the number e.g.-45 or parentheses e.g. (45).) Manufacturing Costs Factory Labor Raw Materials Inventory Manufacturing Overhead $ $ 46600 $ $ $ $ 1. Purchased raw materials 2. Direct materials -33800 -7000 2. Indirect materials 3. Incurred factory labor 4. Direct labor 55700 4600 4. Indirect labor 83700 5. Overhead costs incurred -89120 6. Assigned overhead 7. Completed goods 8. Goods sold

Answer 1

Purchased Raw Materials (E1) 2 Direct Materials (E2) 2 Indirect Materials (E2) 3 incurred Factory Labour (E3) 4 Direct Labor (E4) 4 Indirect Labor (E4) 5 Overhead Costs Incurred (E5) 6 Assigned Overhead (E6) 7 Completed Goods (E7) 8 Goods Sold (E8) (Amount in $) Manufacturing Costs Raw Materials Inventory Factory Labor Manufacturing Overhead Work In Progress Inventory Finished Goods Inventory Cost of Goods Sold 46,600 -33,800 33,800 -7,000 7,000 60,300 -55,700 55,700 -4,600 4,600 83,700 -89,120 89,120 -89,900 89,900 -80,900 89,900

Debit Credit 46,600 46,600 16 Event 1 17 E1 Purchased Raw Materials on account 18 Particulars 19 Purchased Raw Materials 20 Accounts Payable 21 (Purchases recorded on account) 22 23 24 E2 Event 2 25 Work In Progress 26 Manufacturing Overheads 27 Direct Materials 28 Indirect Materials 29 (Raw Material requisitioned to the factory recorded) 30 31 E3 Event 3 Factory labor costs incurred were $60,300 Incurred Factory Labour Factory Labour Payable (Factory Wages Recorded) 33,800 7,000 33,800 7,000 32 33 60,300 34 60,300 35

30 55,700 4,600 37 E4 Event 4 38 Time tickets indicated that $55,700 was direct labor and $4,600 was indirect labor 39 Work In Progress 55,700 40 Manufacturing Overheads 4,600 41 Direct Labor 42 Indirect Labor 43 (Direct and Indirect Labour Recorded) 44 45 E5 Event 5 46 Manufacturing overhead costs incurred on account were $83,700 47 Overhead Costs Incurred 83,700 48 Accounts Payable 49 (Manufacturing overhead costs recorded) 50 51 E6 Event 6 52 Manufacturing overhead was applied at the rate of 160% of direct labor cost 53 Work In Progress (160%* 55,700) 89,120 54 Overhead Costs Incurred 55 (Manufacturing overhead costs recorded) 83,700 89,120

E7	Event 7
	Goods costing $89,900 were completed and transferred to finished goods
	Finished Goods	89,900
	Work In Progress		89,900
	( Goods transferred to Finished Goods)
E8	Event 8
	Finished goods costing $80,900 to manufacture were sold
	Goods Sold	80,900
	Finished Goods		80,900
	( Goods Sold recorded)