Question

Crawford Corporation incurred the following transactions. 1. Purchased raw materials on account $46,400. 2. Raw Materials of $36,100 were requisitioned to the factory. An analysis of the materials requisition slips indicated that $6,900 was classified as indirect materials. 3. Factory labor costs incurred were $60,000, of which $50,000 pertained to factory wages payable and $10,000 pertained to employer payroll taxes payable. 4. Time tickets indicated that $54,100 was direct labor and $5,900 was indirect labor. 5. Manufacturing overhead costs incurred on account were $81,500. 6. Depreciation on the company’s office building was $8,100. 7. Manufacturing overhead was applied at the rate of 150% of direct labor cost. 8. Goods costing $89,000 were completed and transferred to finished goods. 9. Finished goods costing $75,100 to manufacture were sold on account for $104,000.

Answer 1

Journal entries:
S.no.	Accounts title and explanations				Debit $	Credit $
1	Raw material Inventory				46400
	Accounts Payable					46400
2	Work in process inventory				29200
	Manufacturing Overheads				6900
	Raw material inventory					36100
3	factory labour				60000
	Wages payable					50000
	Payroll tax payable					10000
4	Work in process inventory				54100
	Manufacturing Overheads				5900
	Factory labor					60000
5	manufacturing Overheads				81500
	Accounts payable					81500
6	Office Overheads				8100
	Accumulated depreciation - Building					8100
7	Work in process inventory				81150
	Manufacturing Overheads (54100*150%)					81150
8	Finished Goods inventory				89000
	Work in process inventory					89000
9	Accounts receivable				104000
	Sales revenue					104000
10	Cost of goods sold				75100
	Finished Goods inventory					75100