Question

Prepare summary journal entries to record the following transactions for a company in its first month of operations.

A. Raw materials purchased on account, $100,000.

B. Direct materials used in production, $42,000. Indirect materials used in production, $15,000.

C. Paid cash for factory payroll, $50,000. Of this total, $36,000 is for direct labor and $14,000 is for indirect labor.

D. Paid cash for other actual overhead costs, $8,250.

E. Applied overhead at the rate of 120% of direct labor cost.

F. Transferred cost of jobs completed to finished goods, $68,175.

G. Sold jobs on account for $97,000. The jobs had a cost of $68,175.

Answer 1

Answer
Journal entries
No	General Journal	Debit	Credit
a	Raw material	$   100,000
	To Account payable		$   100,000
	(To record raw material purchase)
b	Work in process	$     42,000
	Manufacturing overhead	$     15,000
	To Raw material		$     57,000
	(To record raw material used)
c	Work in process	$     36,000
	Manufacturing overhead	$     14,000
	To Cash		$     50,000
	(To record wages paid)
d	Other overhead	$       8,250
	To Cash		$       8,250
	(To record other overhead)
e	Work in process (42000*1.20)	$     50,400
	To Manufacturing overhead		$     50,400
	(To record applied overhead)
f	Finished goods	$     68,175
	To Work in process		$     68,175
	(To record goods completed)
g	Account receivable	$     97,000
	To Sales revenue		$     97,000
	(To record sales)
	Cost of goods sold	$     68,175
	To Finished goods		$     68,175
	(To record cost of goods sold)