Question

Larned Corporation recorded the following transactions for the just completed month. $84,000 in raw materials were purchased on account. $82,000 in raw materials were used in production. Of this amount, $72,000 was for direct materials and the remainder was for indirect materials. Total labor wages of $125,000 were paid in cash. Of this amount, $102,500 was for direct labor and the remainder was for indirect labor. Depreciation of $196,000 was incurred on factory equipment.

Required: Record the above transactions in journal entries. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Answer 1

1	Raw materials	84000
	Accounts payable		84000
	(To record purchase of raw materials)
2	Work In Progress(WIP)	72000
	Overhead	10000
	Raw materials		82000
	(To record use of materials)
3	WIP	102500
	Overhead	22500
	cash		125000
	(To record wages payment)
4	Overhead	196000
	Accumulated depreciation on equipment		196000
	(To record depreciation accumulated on equipment)

Note;

Depreciation is a factory cost,will go into factory overhead