Journalize the following transactions below.
Alpha Company has two production departments: Cutting and Assembly. During July, the following transaction occurred.
1. |
Purchased $42,500 of raw materials on account. |
|
2. |
Incurred $60,000 of factory labor. (Credit Factory Wages Payable.) |
|
3. |
Incurred $70,000 of manufacturing overhead; $40,000 was paid and the remainder is unpaid. |
|
4. |
Requisitioned materials for Cutting $15,700 and Assembly $8,900. |
|
5. |
Used factory labor for Cutting $33,000 and Assembly $27,000. |
|
6. |
Applied overhead at the rate of $18 per machine hour. Machine hours were Cutting 1,680 and Assembly 1,720. |
|
7. |
Transferred goods costing $67,600 from the Cutting Department to the Assembly Department. |
|
8. |
Transferred goods costing $134,900 from Assembly to Finished Goods. |
|
9. |
Sold goods costing $150,000 for $190,000 on account. |
Journalize the above transactions
Solution:
Journal Entries - Alpha Company | |||
Event | Particulars | Debit | Credit |
1 | Raw material inventory Dr | $42,500.00 | |
To Accounts Payable | $42,500.00 | ||
(To record purchase of raw material) | |||
2 | Factory Wages Dr | $60,000.00 | |
To Factory Wages payable | $60,000.00 | ||
(To record factory labor) | |||
3 | Manufacturing overhead Dr | $70,000.00 | |
To Cash | $40,000.00 | ||
To Accounts payable | $30,000.00 | ||
(To record manufacturing overhead incurred) | |||
4 | Work In Process - Cutting Dr | $15,700.00 | |
Work In Process - Assembly Dr | $8,900.00 | ||
To Raw material inventory | $24,600.00 | ||
(To record raw material used in production) | |||
5 | Work In Process - Cutting Dr | $33,000.00 | |
Work In Process - Assembly Dr | $27,000.00 | ||
To Raw material inventory | $60,000.00 | ||
(To record Direct labor used in production) | |||
6 | Work In Process - Cutting Dr (1680*$18) | $30,240.00 | |
Work In Process - Assembly Dr (1720*$18) | $30,960.00 | ||
To Manufacturing Overhead | $61,200.00 | ||
(To apply manufacturing overhead) | |||
7 | Work In Process - Assembly Dr | $67,600.00 | |
To Work In Process - Cutting | $67,600.00 | ||
(Being units completed in cutting transferred to assembly) | |||
8 | Finished goods inventory Dr | $134,900.00 | |
To Work In Process - Assembly | $134,900.00 | ||
(Being units completed in assembly transferred to finished goods) | |||
9a | Accounts receivables Dr | $190,000.00 | |
To Sales Revenue | $190,000.00 | ||
(To record sales on account)' | |||
9b | Cost of goods sold Dr | $150,000.00 | |
To Finished goods inventory | $150,000.00 | ||
(To record cost of goods sold) |
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