Question

The following information pertains to Rami manufacturing Co.:

1. Beginning inventories: Materials $30,000; Work- in process $12,000; Finished goods $15,000.
2. Ending inventories: Materials $10,000; Work- in process $18,000; Finished goods $12,000.
3. During the year, the company purchased materials of $80,000.
4. The company paid labor wages of $500,000.
5. The overhead manufacturing costs were $180,000.

Instruction: Prepare the journal entries

Answer 1

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Event	Account	Debit	Credit
a	Material inventory	$     80,000
	Accounts Payable		$       80,000
	(To record purchase of inventory)
b	Work in process inventory	$   100,000
	Material inventory		$     100,000
	(To record assignment of material cost)
	$30,000+$80,000-$10,000
c	Work in process Inventory	$   500,000
	Cash		$     500,000
	(To record labor cost)
d	Work in process Inventory	$   180,000
	Various accounts		$     180,000
	(To record manufacturing overhead cost)
e	Finished goods inventory	$   774,000
	Work in process inventory		$     774,000
	(To record goods completed)
	$12,000+$100,000+$500,000+$180,000-$18,000
f	Cost of goods sold	$   777,000
	Finished goods inventory		$     777,000
	(To record cost of goods sold)
	$15,000+$774,000-$12,000