Question

I am struggling to find the right combination of a journal entry for these two situations (2&3). As depicted in note 2, we include factory labor in the cost of manufactured inventory. But the payroll question for factory pay stumps me because of that. Number 3 is a transfer of materials to inventory, and can't find the right combination of accounts to create a sufficient journal entry.
2. During the current year, General Payroll of $6,005,000 was paid in cash and Factory Payroll of $8,507,000 was paid in cash. See accounting policy #2. 3. Part of the raw-materials ($11,300,000 worth) was transferred to Work-In-Process Inventory during the current year. Part of these ($22,800,000 worth) were completed and transferred to Finished-Goods Inventory.

Answer 1

18 19 Credit 20 2) Account Title & Explanation Wages expense Factory Labor Cash (To record cash paid for wages) Debit 6,005,000 8,507,000 21 22 14,512,000 23 24 25 3) 26 11,300,000 Work in Process Inventory Raw Material Inventory (To record transfer of Raw Material Inventory to WIP) 11,300,000 27 28 29 22,800,000 30 Finished Goods Inventory Work in Process Inventory (To transfer completed units to Finished goods Inventory) 22,800,000 31 32 33 34 Note; For General payroll we use wages expense and factory payroll and factory labor is same and we show factory labor or factory payroll in the cost of manufactured inventory 35 36 37