Question

In: Accounting

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

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

  1. Raw materials purchased on account, $88,000.
  2. Direct materials used in production, $39,000. Indirect materials used in production, $17,800.
  3. Paid cash for factory payroll, $55,000. Of this total, $39,000 is for direct labor and $16,000 is for indirect labor.
  4. Paid cash for other actual overhead costs, $7,500.
  5. Applied overhead at the rate of 120% of direct labor cost.
  6. Transferred cost of jobs completed to finished goods, $60,600.
  7. Sold jobs on account for $86,500. The jobs had a cost of $60,600.

Solutions

Expert Solution

No.

Accounting titles & Explanations               

Debit

Credit

1.

Raw materials inventor

88,000

Accounts payable            

88,000

2.

Work in process inventory

39,000

Factory overhead

17,800

Raw materials inventory

56,800

3.

work in process inventory           

39,000

Factory overhead

16,000

cash

55000

4.

Factory overhead           

7,500

cash

7,500

5.

Work in process inventory          

46,800

Factory overhead (39000*120%)                   

46,800

6.

finished goods inventory             

60,600

Work in process inventory               

60,600

7.

Accounts receivable       

86,500

sales

86,500

8.

cost of goods sold           

60,600

Finished goods inventory               

60,600


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