Question

Prepare summary journal entries to record the following transactions for a company in its first month of operations. a. Raw materials purchased on account, $84,000. b. Direct materials used in production, $38,000. Indirect materials used in production, $13,500. c. Paid cash for factory payroll, $45,000. Of this total, $31,000 is for direct labor and $14,000 is for indirect labor. d. Paid cash for other actual overhead costs, $7,250. e. Applied overhead at the rate of 120% of direct labor cost. f. Transferred cost of jobs completed to finished goods, $58,500. g1. Jobs that had a cost of $58,500 were sold. g2. Sold jobs on account for $84,000.

Answer 1

Answer:

Dr Raw materials inventory 84,000  

    Cr Accounts payable 84,000

Dr Work in process inventory 38,000  

    Cr Raw materials inventory 38,000

Dr Factory overhead 13,500  

    Cr Raw materials inventory 13,500

Dr Work in process inventory 31,000  

Dr Factory overhead 14,000  

    Cr Cash 45,000

Dr Factory overhead 7,250  

    Cr Cash 7,250

Dr Work in process inventory 37.200  

    Cr Factory overhead 37,200

 

Dr Finished goods inventory 58,500  

    Cr Work in process inventory 58,500

Dr Cost of goods sold 58,500  

    Cr Finished goods inventory 58,500

Dr Accounts receivable 84,000  

    Cr Sales revenue 84,000