Question

Larned Corporation recorded the following transactions for the just completed month. $86,000 in raw materials were purchased on account. $84,000 in raw materials were used in production. Of this amount, $71,000 was for direct materials and the remainder was for indirect materials. Total labor wages of $128,000 were paid in cash. Of this amount, $102,400 was for direct labor and the remainder was for indirect labor. Depreciation of $191,000 was incurred on factory equipment. Required:Record the above transactions in journal entries. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Answer 1

Answer:

raw materials       86,000 debit

    accounts payable     86,000 credit

--to record purchase of materials--

WIP          71,000 debit

overhead 13,000 debit

      raw materials      84,000 credit

--to record use of materials--

WIP         102,400 debit

overhead 25,600 debit

          cash                    128,000 credit

--to record wages payment--

overhead        191,000 debit

    accumulated depreciation-equipment 191,000 credit

--to record depreciaiton accumulated on equipment--

Explanation:

for materials and labor we do the distinction betwene direct and indirect. As one goes straight into WIP while the other is part of the acutal overehad.

indirect materials  84,000 - 71,000= 13,000

indirect labor  128,000 - 102,400 = 25,600

the depreciaiton which is a factory cost, weill go into factory overhead.