Question

Problem Set A p.61

P2-5A. Journal Entries Paulson Manufacturing Company uses the perpetual inventory system to account for its manufacturing inventories. The following are Paulson’s transactions during July, 2019:

July 5 Received Materials Costing $3,000 from a supplier. The materials were purchased on account.

9 Requisitioned $9,000 of materials for use in the factory, consisting of $7,500 of direct materials       and $1,500 of indirect materials.

11 Recorded the factory payroll: $20, 250 of direct labor and $2,250 of interest labor.

17 Incurred various overhead costs totaling $21,000. (Credit Accounts Payable.)

20 Applied $30,000 of manufacturing overhead to the products being manufactured.

23 Completed product costing $20,000 and moved it to the warehouse.

26 Sold goods with a product cost of $4,500 on account for $7,500.

Required

1. Set up T-accounts for the following four accounts and post the July 1, 2019, balances: Materials Inventory, $10,500; Work-in-Process Inventory, $37,500; Finished Goods Inventory, $15,000; and Cost of Goods Sold, $45,000.
2. Record the transactions listed above in general journal form, post relevant portions to the four T-accounts, and balance the four accounts.

Answer 1