Question

Journalize transactions for two processes.

(LO 2)

Schrager Company has two production departments: Cutting and Assembly. July 1 inventories are Raw Materials $4,200, Work in Process—Cutting $2,900, Work in Process—Assembly $10,600, and Finished Goods $31,000. During July, the following transactions occurred.

1.Purchased $62,500 of raw materials on account.

2.Incurred $60,000 of factory labor. (Credit Wages Payable.)

3.Incurred $70,000 of manufacturing overhead; $40,000 was paid and the remainder is unpaid.

4.Requisitioned materials for Cutting $15,700 and Assembly $8,900.

5.Used factory labor for Cutting $33,000 and Assembly $27,000.

6.Applied overhead at the rate of $18 per machine hour. Machine hours were Cutting 1,680 and Assembly 1,720.

7.Transferred goods costing $67,600 from the Cutting Department to the Assembly Department.

8.Transferred goods costing $134,900 from Assembly to Finished Goods.

9.Sold goods costing $150,000 for $200,000 on account.

Journalize the transactions. (Omit explanations.)

Answer 1

	Journal Entries of Schrager Company
Date	Account Titles and Explanation	Debit	Credit
		In ($)
July
1	Purchases a/c	62,500
	To Accounts Payable a/c		62,500
2	Factory Labour a/c	60,000
	To Wages Payable a/c		60,000
3	Manufacturing Overhead a/c	70,000
	To Cash a/c		40,000
	Manufacturing Overhead Payable a/c		30,000
7	Assembly Department a/c	67,600
	To Cutting Department a/c		67,600
8	Finished goods (Inventory) a/c	134,900
	To Assembly Department a/c		134,900
9	Accounts Receivable a/c	200,000
	To Sales a/c		150,000
	Profit and Loss a/c		50,000