Question

On November 1, Arvelo Corporation had $40,500 of raw materials on hand. During the 9) month, the company purchased an additional $69,500 of raw materials. During November, $78,000 of raw materials were requisitioned from the storeroom for use production. These raw materials included both direct and indirect materials. The indirect materials totaled $4700. Prepare journal entries to record these events. The credits to the Raw Materials account for the month of November total?
A) $110,000
B) S69,500
C) $40,500
D) S78,000

Answer 1

Answer:

Account                                    Debit                         Credit

Work in process                      $73,300

($78,000-$4,700)

Manufacturing overhead        $4,700

Raw material                                                              $78,000

Option D is correct($78,000)

Explanation:

Journal Entries:

They help to keep track of transactions as debited and credited. It helps to manage accounts and shows all the details of transactions.

Since total of $78,000 raw materials were requisitioned from the storeroom for use production. So it is credited as Raw material n journal. Indirect material is $4,700 acts as manufacturing overhead in journal as debit and remaining will be work in  process (($78,000-$4,700)) as debit.

Journal entries to record these events:

Account                                    Debit                         Credit

Work in process                      $73,300

($78,000-$4,700)

Manufacturing overhead        $4,700

Raw material                                                              $78,000

Part B:

Option D is correct($78,000)

The credits to the Raw Materials account for the month of November total is $78,000.