Question

Brief Exercise 15-02 During January, its first month of operations, Coronado Company accumulates the following manufacturing costs: raw materials $4,400 on account, factory labor $6,200 of which $5,800 relates to factory wages payable and $400 relates to payroll taxes payable, and factory utilities payable $2,100. Prepare separate journal entries for each type of manufacturing cost.

Answer 1

Answer:

Item 1

Debit : Raw Materials $4,400

Credit : Accounts Payable $4,400

Item 2

Debit : Work in Process : Factory wages ($5,800 + $400)  $6,200

Credit : Wages Payable $6,200

Item 3

Debit : Work In Process : Factory Utilities $2,100

Credit : Utilities Payable $2,100

Explanation:

If there is no immediate payment of cash for the expenses incurred, raise a liability - Accounts Payable otherwise recognize a Cash Outflow.

All manufacturing costs incurred are accounted for in the Work In Process Account.

Journal entries for each type of manufacturing cost have been prepared above.