Question

Larned Corporation recorded the following transactions for the just completed month. a. $90,000 in raw materials were purchased on account b. $88,000 in raw materials were used in production of this amount, $76,000 was for direct materials and the remainder was for indirect materials. c. Total labor wages of $112,000 were paid in cash. Of this amount, $104,100 was for direct labor and the remainder was for indirect labor. d. Depreciation of $199,000 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.) View transaction list Journal entry worksheet 1 2 3 4 $90,000 in raw materials were purchased on account. Prey 1 of 6 Next >

Answer 1

transaction	general journal	debi	credit
a	raw materials inventory	90000
	cash		90000

purchase of raw materials on cash increases the raw material,as the raw material is an asset account and it gets debited when it increases and cash is also an asset account and it gets credited when it decreases

transaction	general journal	debi	credit
b	work in process inventory	76000
	manufacturing overhead	12000
	raw materials inventory		88000

direct material cost is recorded as work in process , work in process is an inventory account which is an asset and it gets debited when it increases and indirect raw materials are (88000-76000=12000) recorded as the manufacturing overheads, manufacturing overhead costs incurred in a period are recorded as debits in the manufacturing overhead account. raw materials inventory is an asset acount which will be credited when it decreases.

transaction	general journal	debi	credit
c	work in process	104100
	manufacturing overhead	7900
	cash		112000

direct labor cost is recorded as the work in process, which is an asset and it gets debited when it increases and indirect labour costs are (112000-104100=7900) recorded as manufacturing overheads, manufacturing overhead costs incurred in a period are recorded as debits in the manufacturing overhead account. cash is an asset account and it gets credited when it decreases.

transaction	general journal	debit	credit
d	depreciation	199000
	accumulated depreciation		199000

depreciation is a non cash expense account which gets debited when it increases and accumulated depreciation is a contra account which always have a credit balance.