Answer:
(a) Debited all the loses and expenses and credited all the increased liability.
Factory Labor a/c Dr. $80,000
To Factory wages payable $66,000
To Employer payroll tax payable $8,000
To Employer fringe benefits payable $6,000
(recording of factory labor costs)
(b) All increased assets and expenses and losses are debited and credited the increased liability.
Work in process Inventory a/c (85% of $80,000) Dr. $68,000
Manufacturing account a/c (15% of $80,000) Dr. $12,000
To Factory Labor $80,000
(recording of factory labor to production)
