Question

Larned Corporation recorded the following transactions for the just completed month. $78,000 in raw materials were purchased on account. $76,000 in raw materials were used in production. Of this amount, $62,000 was for direct materials and the remainder was for indirect materials. Total labor wages of $111,000 were paid in cash. Of this amount, $105,000 was for direct labor and the remainder was for indirect labor. Depreciation of $198,000 was incurred on factory equipment.
Required:
Record the above transactions in journal entries.

Answer 1

Answer and Explanation:

The Journal entries are shown below:-

a. Raw materials inventory Dr, $78,000

       To Accounts payable $78,000

(Being raw material inventory is recorded)

b. Work in process inventory Dr,  $62,000

Manufacturing overhead Dr, $14,000

       Raw materials inventory $76,000

(Being raw materials is recorded)

c. Work in process inventory Dr, $105,000

Manufacturing overhead Dr, $6,000

       To Cash $111,000

(Being cash is recorded)

d. Manufacturing overhead Dr, $198,000

       To Accumulated depreciation-Equipment $198,000

(Being depreciation is recorded)