Question

Journalize the following transactions for Gecco Manufacturing.
1. Purchased raw materials on account, $660,000.
2. Raw materials used in production: direct materials = $504,000
and indirect materials = $73,500.
3. Incurred total manufacturing wages of $681,500, of which
$586,000 was direct labor and $95,500 was indirect labor.
4. Other manufacturing overhead costs incurred (depreciation, insurance,
property taxes, etc.) totalled $215,220. (Record one transaction
and credit "Other Accounts.")
5. Allocated manufacturing overhead to jobs, 65% of direct labor costs.
6. Completed production on jobs with costs of $871,800.
7. Sold inventory on account for $1,290,000 that cost $860,000 to manufacture.
8. Record the adjustment to transfer the remaining balance in the manufacuturing overhead account to cost of goods sold.
Transaction #					DEBIT		CREDIT

Answer 1

Date	Account Title	Debit	Credit
	Raw Materials Inventory	660,000
	Accounts Payable		660,000
	(Purchased raw material on account)
	Work in Process	504,000
	Manufacturing Overhead	73,500
	Raw Materials Inventory		577,500
	(To record material used in production)
	Work in Process	586,000
	Manufacturing Overhead	95,500
	Wages Payable		681,500
	(Record of direct wages and indirect wages)
	Manufaturing Overhead	215,220
	Other Accounts		215,220
	(Other manufacturing Overhead incurred)
	Work in Process	380,900
	Manufaturing Overhead		380,900
	(Allocation of overhead-65% of direct labour cost)
	(586000 X 65%)
	Finished Goods Inventory	871,800
	Work in Process		871,800
	(Being completed jobs transferred to finished goods)
	Accounts Receivable	1,290,000
	Sales Revenue		1,290,000
	(To record sales of Job)
	Cost of Goods Sold	860,000
	Finished Goods Inventory		860,000
	(To record cost of goods sold for Job )
	Cost of Goods Sold	3,320
	Manufaturing Overhead		3,320
	(Record of under applied overhead to Cost of Goods Sold)
	Manufacturing Overhead-Indirect Material	73,500
	Manufacturing Overhead-Indirect wages	95,500
	Manufaturing Overhead-Other accounts	215,220
		384,220
	Less:Overhead applied	(380,900)
	Under Applied Overhead	3,320