Question

The following transactions occurred in April at Steve’s Cabinets, a custom cabinet firm.

1. Purchased $25,500 of materials on account.

2. Issued $1,750 of supplies from the materials inventory.

3. Purchased $13,100 of materials on account.

4. Paid for the materials purchased in transaction (1) using cash.

5. Issued $15,500 in direct materials to the production department.

6. Incurred direct labor costs of $29,500, which were credited to Wages Payable.

7. Paid $23,100 cash for utilities, power, equipment maintenance, and other miscellaneous items for the manufacturing plant.

8. Applied overhead on the basis of 130 percent of $29,500 direct labor costs.

9. Recognized depreciation on manufacturing property, plant, and equipment of $11,900.

The following balances appeared in the accounts of Steve’s Cabinets for April.

	Beginning			Ending
Materials Inventory	$	32,490			?
Work-in-Process Inventory		8,500			?
Finished Goods Inventory		35,100		$	29,590
Cost of Goods Sold					55,530

Required:

a. Prepare journal entries to record the transactions.

Answer 1

Answer
TR	General Journal	Debit	Credit
1)	Raw materials inventory	$      25,500
	Accounts payable		$      25,500
2)	manufacturing overhead	$        1,750
	Raw materials inventory		$        1,750
3)	Raw materials inventory	$      13,100
	Accounts payable		$      13,100
4)	Accounts payable	$      25,500
	cash		$      25,500
5)	work in process inventory	$      15,500
	Raw materials inventory		$      15,500
6)	work in process inventory	$      29,500
	Wages payable		$      29,500
7)	Manufacturing overhead	$      23,100
	Cash		$      23,100
8)	work in process inventory	$      38,350
	manufacturing overhead		$      38,350
9)	manufacturing overhead	$      11,900
	Accumulated depreciation		$      11,900