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Illusion [34]
3 years ago
14

In double-entry accounting, where should you record money that is leaving your company to pay bills?

Business
1 answer:
lesantik [10]3 years ago
5 0

Answer:

In the Debit Column of your Expense Account

Explanation:

You might be interested in
Inventories Raw materials $ 42,000 $ 32,000 Work in process 9,100 18,300 Finished goods 57,000 34,300 Activities and information
Svetach [21]

Answer:

a. Computation of the following amounts for the month of May using T-accounts:

1. Cost of direct materials used = $176,000

2. Cost of direct labor used = $77,000

3. Cost of goods manufactured = $286,150

4. Cost of goods sold = $308,850

5. Gross profit = $691,150

6. Overapplied or underapplied overhead = $89,650 (underapplied)

b. Journal Entries:

Debit Raw materials $172,000

Credit Cash $172,000

To record the purchase of raw materials for cash.

Debit Factory payroll $100,000

Credit Cash $100,000

To record the payroll paid in cash.

Debit Factory overhead:

 Indirect materials $6,000

 Indirect labor $23,000

 Other overhead costs 103,000

Credit Raw materials $6,000

Credit Factory payroll $23,000

Credit Cash $103,000

To record indirect materials, labor and other costs.

Debit Work in process $42,350

Credit Factory overhead $42,350

To apply overhead based on direct labor cost 55%.

Debit Cash $1,000,000

Credit Sales Revenue $1,000,000

To record the sale of goods for cash.

Explanation:

a) Data and Calculations:

Inventories:

Raw materials $ 42,000 $ 32,000

Work in process 9,100 18,300

Finished goods 57,000 34,300

Activities for May:

Raw materials purchases (paid with cash) 172,000

Factory payroll (paid with cash) 100,000

Factory overhead:

Indirect materials 6,000

Indirect labor 23,000

Other overhead costs 103,000

Sales (received in cash) 1,000,000

Predetermined overhead rate based on direct labor cost 55%

T-accounts:

Raw materials

Beginning balance $ 42,000

Cash                         172,000

Manufacturing overhead                6,000

Work in process                          176,000

Ending balance                         $ 32,000

Work in process

Beginning balance    9,100

Raw materials       176,000

Payroll                     77,000

Overhead applied 42,350

Finished goods                          286,150

Ending balance                            18,300

Finished goods

Beginning balance 57,000

Work in process   286,150

Cost of goods sold                   308,850

Ending balance                           34,300

Manufacturing overhead

Indirect materials             6,000

Indirect labor                 23,000

Other overhead costs 103,000

Work in process                            42,350

Underapplied overhead               89,650

Sales revenue    $1,000,000

Cost of goods sold 308,850

Gross profit            $691,150

Analysis of Transactions:

Raw materials $172,000 Cash $172,000

Factory payroll $100,000 Cash $100,000

Factory overhead:

Indirect materials $6,000 Raw materials $6,000

Indirect labor $23,000 Factory payroll $23,000

Other overhead costs 103,000 Cash $103,000

Work in process $42,350 Factory overhead $42,350

Predetermined overhead rate based on direct labor cost 55%

Cash $1,000,000 Sales Revenue $1,000,000

5 0
2 years ago
Monique’s Florals produced a special Mother’s Day arrangement that included eight roses. The standard and actual costs of the ro
Dmitry [639]

Answer:

1. Total flexible budget materials variance $189 Favourable

2. Materials price variance $513 Favorable

3. Materials usage variance $324 Unfavorable

4. Total Variance $189 Favorable

Explanation:

1. Calculation to Determine the total flexible budget materials variance

Using this formula

Total flexible budget materials variance=Standard cost - Actual cost

Let plug in the formula

Total flexible budget materials variance=($ 8.19*900)-($ 7.98*900)

Total flexible budget materials variance=$7,371-$7,182

Total flexible budget materials variance=$189 Favourable

Therefore Total flexible budget materials variance is $189 Favorable

2. Calculation to Determine the materials price variance

Using this formula

Materials price variance=(Standard price -Actual price)*Actual quatity

Let plug in the formula

Materials price variance=($ 0.90 - $ 0.84)*(900*9.50)

Materials price variance=$0.06*8,550

Materials price variance=$513 Favorable

Therefore Materials price variance is $513 Favorable

3. Calculation to Determine the materials usage variance

Using this formula

Materials usage variance=(Standard quatity-Actual quantity)*Standard price

Let plug in the formula

Materials usage variance=[(900*9.10)-8,550]*$ $0.90

Materials usage variance=(8,190-8,550)*$0.90

Materials usage variance=-360*$0.90

Materials usage variance=$324 Unfavorable

Therefore Materials usage variance is $324 Unfavorable

4. Calculation to Confirm the accuracy of Requirements a, b, and c

Materials price variance is $513 Favorable

Less Materials usage variance $324 Unfavorable

Total Variance $189 Favorable

Therefore the accuracy of Requirements a, b, and c is $189 Favorable

8 0
2 years ago
Jing Company was started on January 1, Year 1 when it issued common stock for $31,000 cash. Also, on January 1, Year 1 the compa
romanna [79]

Answer:

$156

Explanation:

equipment cost = $15,500 + $1,600 = $17,100

five year useful life ⇒ double declining depreciation rate = (1 / 5) x 2 = 40%

salvage value = $6,000

  • depreciation year 1 = 40% x $17,100 = $6,840, book value = $10,260
  • depreciation year 2 = 40% x ($17,100 - $6,840) = $4,104, book value = $6,156
  • depreciation year 3 = book value - salvage value = $6,156 - $6,000 = $156

When you use the double declining balance, depreciation expenses ceases when the book value = salvage value.

6 0
3 years ago
For 2016, RWC earned revenues totaling $250,000. Of that $250,000, $200,000 was collected immediately. In addition, the $20,000
vfiekz [6]

Answer:

$60,000

Explanation:

Under accrual basis of accounting,  

Revenues are recorded when it's earned, it does not base on when it is collected.

So the Revenues for 2016 should be $250,000 alone.

Similarly, expenses are recorded when it is incurred rather than when it is paid.

So the Expenses for 2016 should only be $190,000

As a result, the <u>Net Income is $60,000</u> ($250,000 - $190,000)

8 0
3 years ago
In 2020, Orear Manufacturing signed a contract with a supplier to purchase raw materials in 2021 for $700,000. Before the Decemb
Ludmilka [50]

Answer: as a current liability

Explanation:

From the question, we are given the information that Orear Manufacturing signed a contract with a supplier to buy raw materials in 2021 for $700,000 and before the December 31, 2020 balance sheet date, the market price for these materials dropped to $510,000.

The journal entry to record this situation at December 31, 2020 will result in a credit that should be reported in the current liability. It should be noted that current liabilities are the liabilities for the financial obligations for a company on a short-term basis which are normally due within a period of one year.

Examples of current liabilities are accruwed expenses, accounts payables, short-term debt, and dividends payable.

3 0
3 years ago
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