Question

During the current month, a company that uses job order costing purchases $98,000 in raw materials for cash. It then uses $13,000 of raw materials indirectly as factory supplies and uses $75,100 of raw materials as direct materials. Prepare journal entries to record these three transactions

Answer 1

JOURNAL

Account Titles and Explanation Debit Credit

Raw Material inventory $98,000

Cash $98,000

(To record the raw material purchased for cash)

Factory Supplies $13,000

Raw material inventory $13,000

(To record the usage of raw materials as supplies)

Work in Progress inventory $75,100

Raw material inventory $75,100

(To record the usage of raw materials in production)