Question

$80,000 in raw materials were purchased on account. $78,000 in raw materials were used in production. Of this amount, $68,000 was for direct materials and the remainder was for indirect materials. Total labor wages of $126,500 were paid in cash. Of this amount, $104,200 was for direct labor and the remainder was for indirect labor. Depreciation of $194,000 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

Step-by-step explanation:

The journal entries are shown below:

1. Raw material A/c Dr $78,000

To Accounts payable A/c $78,000

(Being raw material purchased)

2. Work in progress A/c Dr $68,000

Manufacturing overhead A/c Dr $10,000

To Raw material A/c $78,000

(Being raw material allocated)

3. Labor wages A/c Dr $126,500

To Cash A/c $126,500

(Being labor wages are paid in cash)

4. Work in progress A/c Dr $104,200

Manufacturing overhead A/c Dr $22,300

To Labor wages payable A/c $126,500

(Being labor wages are allocated)

5. Depreciation A/c $194,000

To Factory Equipment $194,000

(Being depreciation is charged on factory equipment)