Question

Manning Corporation incurred the following transactions.

1. Purchased raw materials on account $52,000.

2. Raw Materials of $45,900 were requisitioned to the factory. An analysis of the materials

requisition slips indicated that $7,500 was classified as indirect materials.

3. Factory labor costs incurred were $87,000. Time tickets indicated that $81,500 was direct labor and the rest was indirect labor

4. Overhead costs incurred on account were $79,500.

5. Factory depreciation was $13,000.

6. Administrative salaries accrued were $25,000.

7. Manufacturing overhead was applied at the rate of 120% of direct labor cost.

8. Goods costing $98,000 were completed and transferred to finished goods.

9. Finished goods costing $83,000 to manufacture were sold on account for $145,000.

Instructions:

Journalize the transactions.

Answer 1

	Journal entries
	Date	Particulars	Debit	Credit
	1	Raw materials	$52,000
		Accounts Payable		$52,000
		(For raw material purchased on account)
	2	Work-in- process inventory (Direct)	$38,400
		Manufacturing Overhead (indirect)	$7,500
		Raw materials		$45,900
		(For raw material used)
	3	Work-in- process inventory (Direct)	$81,500
		Manufacturing Overhead (indirect)	$5,500
		Wages and salaries Payable		$87,000
		(For labor cost incurred)
	4	Manufacturing overhead	$79,500
		Accounts Payable		$79,500
		(For overhead cost incurred)
	5	Manufacturing overhead	$13,000
		Accumulated depreciation		$13,000
		(For overhead cost incurred)
	6	Salaries Expenses	$25,000
		Salaries Payable		$25,000
		(For administartive salaries accrued)
	7	Work-in- process (120% of 87,000)	$104,400
		Manufacturing overhead		$104,400
		(For manufacturing overhead applied)
	8	Finished Goods	$98,000
		Work-in- process		$98,000
		(For goods completed and transfer)
	9	Accounts Receivable	$145,000
		Sales		$145,000
		(For goods sold on account)
	10	Cost of goods sold	$83,000
		Finished Goods		$83,000
		(For cost of goods sold)
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