Question

Schrager Company has two production departments: Cutting and Assembly. July 1 inventories are Raw Materials $5,200, Work in Process—Cutting $3,700, Work in Process—Assembly $10,800, and Finished Goods $32,800. During July, the following transactions occurred. 1. Purchased $63,700 of raw materials on account. 2. Incurred $61,900 of factory labor. (Credit Wages Payable.) 3. Incurred $71,500 of manufacturing overhead; $41,600 was paid and the remainder is unpaid. 4. Requisitioned materials for Cutting $17,800 and Assembly $9,300. 5. Used factory labor for Cutting $34,900 and Assembly $27,000. 6. Applied overhead at the rate of $20 per machine hour. Machine hours were Cutting 1,710 and Assembly 1,770. 7. Transferred goods costing $69,410 from the Cutting Department to the Assembly Department. 8. Transferred goods costing $136,900 from Assembly to Finished Goods. 9. Sold goods costing $151,800 for $201,400 on account. Journalize the transactions. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Answer 1

Answer:

raw materials 63,700 debit

     account payable    63,700 credit

Factory overhead   71,500 debit

          cash                         41,600 credit

          account payable    29,900 credit

WIP-Cutting        17,800    debit

WIP- Assembly    9,300   debit

   raw materials           27,100 credit

WIP-Cutting             34,900 debit

WIP- Assembly        27,000 debit

          Wages Payable      61,900 credit

WIP-Cutting             34,200 debit

WIP- Assembly        35,400 debit

      Factory Overhead       69,600 credit

WIP - Assembly  69,410 debit

   WIP- Cutting         69,410 credit

Finished Good   136,900 debit

   WIP - Assembly         136,900

Cost of good sold 151,800 debit

    Finished Goods Inventory    151,800 credit

Account receivables 201,400 debit

       Sales Revenue          201,400 credit

cost of goods sold   1,900 debit

      factory overhead      1,900 credit

Explanation:

We reocrd followig the basic accounting rules:

debit = credit

the origin of the cost will be place in credit while the destination in debit.

Other way to describe, the FROM goes in credit

and the "TO" in credit.

FROM cuttting TO Assembly

FROM Assembly TO finished good

FROM material TO cutting TO assembly and so on.

Last:

The factory overhead will be adjusted against cost of good sold

we apply overhead for 69,600 but incurred 71,500

we underapplied for 1,900

so we add these cost into COGS