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, $114,000.

 b. Direct materials used in production, $45,500. Indirect materials used in production, $20,400

 c. Paid cash for factory payroll, $50,000. Of this total, $37,000 is for direct labor and $13,000 is for indirect labor.

 d. Paid cash for other actual overhead costs, $9,125.

 e. Applied overhead at the rate of 125% of direct labor cost. 

 f. Transferred cost of jobs completed to finished goods, $80,500. 

 g. Sold jobs on account for $115,000. The jobs had a cost of $80,500.  

Answer 1

A	Raw materials inventory	114,000
	Accounts Payable		114,000
B	Work in Process Inventory	45,500
	Manufacturing overhead	20,400
	Raw materials inventory		65,900
C	Work in Process Inventory	37,000
	Manufacturing overhead	13,000
	Cash		50,000
D	Manufacturing overhead	9125
	Cash		9125
E	Work in Process Inventory	46,250
	Manufacturing overhead		46,250
	(125%*37,000)
F	Finished goods inventory	80,500
	Work in Process Inventory		80,500
G	Accounts Receivable	115,000
	Sales revenue		115,000
	Cost of Goods Sold	80,500
	Finished goods inventory		80,500