Question

Prepare summary journal entries to record the following transactions for a company in its first month of operations. a. Raw materials purchased on account, $116,000. b. Direct materials used in production, $46,000. Indirect materials used in production, $20,600. c. Paid cash for factory payroll, $55,000. Of this total, $41,000 is for direct labor and $14,000 is for indirect labor. d. Paid cash for other actual overhead costs, $9,250. e. Applied overhead at the rate of 120% of direct labor cost. f. Transferred cost of jobs completed to finished goods, $85,600. 91. Jobs that had a cost of $85,600 were sold. g2. Sold jobs on account for $123,000. View transaction list Journal entry worksheet 1 N 3 3 4 5 6 7 8 9 > Record raw materials purchased on account. Note: Enter debits before credits. Transaction General Journal Debit Credit a Record entry Clear entry View general journal

Answer 1

Credit Debit $116,000 Si.No. Transaction General Journal 1 a Raw Materials Inventory Accounts Payable (To record raw materials purchased on account) $116,000 2 b1 $ 46,000 Work in Process Inventory Raw Materials Inventory (To record direct materials used in Production) $ 46,000 3 b2 $ 20,600 Factory Overhead Raw Materials Inventory (To record indirect materials used in production) $ 20,600 4 с $ 41,000 $ 14,000 Work In process Inventory Factory Overhead Cash (To record payment of factory payroll) $ 55,000 5 d $ 9,250 Factory overhead Cash (To record payment of overhead costs) $ 9,250 6 e $ 49,200 Work In process Inventory Factory overhead (To record applied factory overhead) $ 49,200

7 f $ 85,600 Finished Goods Inventory Work In Process Inventory (To record transfer of completed cost of jobs to finished goods ) $ 85,600 8 gl $ 85,600 Cost of goods Sold Finished Goods Inventory (To record cost of jobs sold) $ 85,600 9 $ 123,000 Accounts Receivable Sales (To record sale of jobs on account) $ 123,000 Working Notes: Factory Overhead = $41,000*120% = $49,200 e.