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Journal Entries Paulson Manufacturing Company uses the perpetual inventory system to account for its manufacturing inventories. The following are Paulsons transactions during July 2016 July Received material costing $4,000 from a supplier. The material was purchased on account. Requisitioned $12,000 of material for use in the factory, consisting of $10,000 of direct material and $2,000 of indirect material 11 Recorded the factory payrol: 27,000 of direct labor and $3,000 of indirect labor. 17 Incurred various overhead costs totaling $28,000. (Credit Accounts Payable.) 20 Applied $40,000 of manufacturing overhead to the products being manufactured. 23 Completed product costing $32.000 and moved it to the warehouse 26 Sold goods with a product cost of $6,000 on account for $10,000. a. and b. Record the transactions listed above in general journal form, post relevant portions to the four T-accounts set-up below, and balance the four accounts. General Journal Date Description Debit Credit July 5 July 9 Work in process inventory July 11 Workin process inventory
July 11 Work in process inventory July 17 0 July 20 July 23 July 26 To record cost of goods sold. July 26 To record sale of product
rortoccorts etre tonec appropriate debit or credit column. Materials Inventory Finished Goods Inventory 14,000 Bal. 20,000 Bal Bal. Bal Work in Process Inventory Cost of Goods Sold 50,000 Bal. 60,000 Bal. Bal. Bal.
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General Journal Debit Credit $ Date Jul-5 Raw material Inventory Description 4,000 Accounts payable 4,000 Purchase of raw materials on account Jul-9 Work In Process Inventory 10,000 2,000 Manufacturing Overhead (To record materials used) Manufacturing Overhead (To assign factory labor to production) Raw material Inventory 12,000 27,000 3,000 Jul-11 Work In Process Inventory Factory Payroll 30,000 Jul-17 Manufacturing Overhead 28,000 Overhead payable 28,000 (To record manufacturing Overhead payable) Jul-20 Work In Process Inventory 40,000 Manufacturing Overhead 40,000 (To apply manufacturing overhead to production) Jul-23 Finished Goods Inventory 32,000 32,000 Work in Process Inventory o record completion of production Jul-26Cost of Goods Sold 6,000 Finished Goods Inventory o record cost of goods sold) 6,000 Jul-26 Accounts Receivable 10,000 Sales 10,000 (To record sale of product)Materials Inventory 10,000 2,000 14,000 Work in Progress Inventory (b) Bal. Accounts payable(a) Bal. 4,000 Manufacturing Overhead (c) 6,000 Work in Process Inventory 32,000 Bal. Materials Inventory (b) Factory payroll (d) Manufacturing Overhead (e) Bal. 50,000 Finished Goods Inventory (f) 10,000 27,000 40,000 95,000 Finished Goods Inventory 20,000 Cost of Goods Sold (g) 32,000 46,000 Bal. 6,000 ork in Process Inventory (f) Bal. Cost of Goods Sold Bal. Finished Goods Inventory (g) Bal. 60,000 6,000 66,000 Explanantions:- (a) Raw materials costing $4,000 were purchased. (b) Direct materials requisitioned for production amounted to $10,000. (c) Indirect materials requisitioned for production amounted to $2,000. (d) Factory labor incurred consisted of Direct $27,000 and Indirect $3,000. (e) Manufacturing overhead applied to production was $40,000. (f) Completed goods costing $32,000 were transferred to finished goods inventory (g) Finished goods costing $6,000 were sold.

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