Question

Sanders Company uses a job order costing system and has one WIP production
department. Journalize the transactions below.
1)Purchased $35,000 of raw materials on account.
2)Requisitioned materials; $8,000 direct, $2,000 indirect, to be used in production.
3)Allocated factory labor; $20,000 direct, $13,000 indirect
4)Allocated manufacturing overhead based on 110% of direct labor.
5)Incurred $40,000 of manufacturing overhead; $35,000 was unpaid (credit AP) and $5,000 was accumulated depreciation.
6)Cost of completed production for the month is $23,000.
7)Cost of finished goods sold is $8,000; selling price is $20,000. (All sales are on account)

Answer 1

	No	Accounting titles & Explanations				Debit	Credit
	1)	Raw materials inventory				35,000
		accounts payable					35,000
	2)	Work in process inventory				8,000
		Factory overhead				2,000
		Raw materials inventory					10,000
	3)	Work in process inventory				20,000
		Factory overhead				13,000
		Factory wages payable					33,000
	4)	Work in process inventory				22000
		Factory overhead					22,000
		(20000*110%)
	5)	Factory overhead				40,000
		Accounts payable					35,000
		Accumulated Depreciation					5,000
	6)	Finished goods inventory				23,000
		work in process inventory					23,000
	7)	Cost of goods sold				8,000
		Finished goods inventory					8,000
		Accounts recievbale				20,000
		sales					20,000