Prepare summary journal entries to record the following transactions and events

Question

Prepare summary journal entries to record the following transactions and events a through g for a company in its first month of operations a. Raw materials purchased on account, $86,000 b. Direct materials used in production. $38,500 Indirect materials used in production, $23,000 c. Paid cash for factory payroll. $50,000 Of this total. $38,000 is for direct labor and $12,000 is for indirect labor cash for other actual overhead costs, $7,375 Applied overhead at the rate of 125% of direct labor cost f. Transferred cost of jobs completed to finished goods. $62,600 g. Sold jobs on account for $90,000 The jobs had a cost of $62,600

Explanation / Answer

Dr ($) Cr ($) a) Material Purchase            86,000 Sundry Creditors            86,000 b) No journal entry required c) Labour wages            50,000 Bank            50,000 d) Overhead expenses              7,375 Bank              7,375 e) No journal entry required f) Finished Goods            62,600 Work in Progress            62,600 g) Sundry Debtors 90,000            90,000 Sales Revenue

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