Answer:
<em>Purchased $30,000 of materials on account.
</em>
Materials $30,000 (debit)
Trade Payable $30,000 (credit)
<em>Issued $1,500 of supplies from the materials inventory.
</em>
Manufacturing Account $ 1,500 (debit)
Materials $ 1,500 (credit)
<em>Purchased $37,500 of materials on account.
</em>
Materials $37,500 (debit)
Trade Payable $37,500 (credit)
<em>Paid for the materials purchased in transaction (1) using cash.
</em>
Trade Payable $30,000 (debit)
Cash $37,500 (credit)
<em>Issued $45,000 in direct materials to the production department.
</em>
Manufacturing Account $45,000 (debit)
Materials Account $45,000 (credit)
<em>Incurred direct labor costs of $37,500, which were credited to Wages Payable.
</em>
Manufacturing Account $37,500 (debit)
Wages Payable $37,500 (credit)
<em>Paid $42,250 cash for utilities, power, equipment maintenance, and other miscellaneous items for the manufacturing shop.
</em>
Manufacturing Overheads $ 42,250 (debit)
Cash $ 42,250 (credit)
<em>Applied overhead on the basis of 140 percent of direct labor costs.
</em>
Manufacturing overheads $ 10,250 (debit)
Cost of Goods Sold $10250 (credit)
<em>Recognized depreciation on manufacturing property, plant, and equipment of $7,500</em>
Manufacturing Overhead - depreciation $ 7,500 (debit)
Accumulated Depreciation $ 7,500 (credit)
Explanation:
<em>Purchased $30,000 of materials on account.
</em>
Recognise an Asset - Materials and Recognise a Liability - Trade Payable
<em>Issued $1,500 of supplies from the materials inventory.
</em>
De-reconise an Asset - Materials and Recognise cost of manufacturing - Manufacturing Account.
<em>Purchased $37,500 of materials on account.
</em>
Recognise an Asset - Materials and Recognise a Liability - Trade Payable
<em>Paid for the materials purchased in transaction (1) using cash.
</em>
De-recognise Liability - Trade Payable and De-recognise asset - Cash
<em>Issued $45,000 in direct materials to the production department.
</em>
De-recognise Asset - Materials and recognise Manufacturing cost - Manufacturing Account
<em>Incurred direct labor costs of $37,500, which were credited to Wages Payable.
</em>
Recognise the Liability Wages Payable and a Manufacturing Cost - Salaries and Wages
<em>Paid $42,250 cash for utilities, power, equipment maintenance, and other miscellaneous items for the manufacturing shop.
</em>
Recognise Overhead expenses in Manufacturing Accounts and De-recognise Asset - Cash
<em>Applied overhead on the basis of 140 percent of direct labor costs.
</em>
Adjast overapplied manufacturing overheads to cost of goods sold
<em>Recognized depreciation on manufacturing property, plant, and equipment of $7,500</em>
Recognise an overhead expense and de-recognise asset through Accumulated depreciation