Crawford Corporation ncurred the following transactlens. Purchased raw materia s

Question

Crawford Corporation ncurred the following transactlens. Purchased raw materia s on account 154,500. Raw Materials & $38,500 were requtstloned to the 'actccy. An analysis o- the materials requisition sllps indicated that $9,000 was classified as indirect materals. Factory a tor costs Incurred were $62,500, of which $50,500 pertained to factory wages payable and $12,000 pertained to employer payrol taxes payable. Time tickets indicated that $54,700 was direct labcr and $7,800 was Indirect labor. Manufacturing overhead costs ncurred on account were $H4,9CO. Depreciation on me company's office build ng was $B.800. Manufacturing overhead was app cd at the rate of 150%% o' direct abor cost. Gcods costing $91,400 were completed and transferred to finished goods. Fnlshed gcods costing $75,300 to manufacture were sold on account for $109,700. Journalize the transact ons.

Explanation / Answer

Raw materials -inventory A/c--------------------------------Dr

To Accounts payable

(Being Rawmaterials purchased on account)

54500

WIP-Direct Materials------------------------------------Dr

WIP-Indirect Materials---------------------------------Dr

To Raw Materials-Inventory A/c

(

Factory Payroll A/c---------------------------------Dr

To Factory wages Payble A/c

To Employer taxes payable on facory payroll A/c

(Being Due on Factory Payroll a/c)

62500

50500

12500

Goods in Process Inventroy A/c------------Dr

Factory Overhead A/c---------------------------Dr

To Facory Payroll A/c

(Being Factory Labour costs consists of direct and indirect labour)

54700

7800

Manufacturing Overhead cost pool A/c--------------------------------Dr

To Accounts Payble A/c

(being manufacturing overead cost payble)

84900

Depreciation on Office Buildings A/c----------------------------Dr

To Office Buildings A/c

(Being Depreciation calculated on company's office builidings

8800

Goods in Process inventory A/c-------------------------Dr

To Manufacturing Overhead cost pool A/c

(being manufacturing overhead cost applied on dierct labour cost)

82050

82050

Finised goods invntory A/c-----------------------------------Dr

To work- in- process inventory a/c

(being work in process goods transefered to finised goods)

91400

Accounts Receivables A/c---------------------------------Dr

To Finised Goods Account

To Profit and Loss A/c

(Being Finished Goods sold for profit on credit)

109700

75300

34400

Cost of goods sold expenses a/c--------------Dr

To finised goods a/c

(to record the cost of sale)

75300

Sl.No Particulars Debit Credit 1

Raw materials -inventory A/c--------------------------------Dr

To Accounts payable

(Being Rawmaterials purchased on account)

54500

54500 2

WIP-Direct Materials------------------------------------Dr

WIP-Indirect Materials---------------------------------Dr

To Raw Materials-Inventory A/c

(

3

Factory Payroll A/c---------------------------------Dr

To Factory wages Payble A/c

To Employer taxes payable on facory payroll A/c

(Being Due on Factory Payroll a/c)

62500

50500

12500

4

Goods in Process Inventroy A/c------------Dr

Factory Overhead A/c---------------------------Dr

To Facory Payroll A/c

(Being Factory Labour costs consists of direct and indirect labour)

54700

7800

62500 5

Manufacturing Overhead cost pool A/c--------------------------------Dr

To Accounts Payble A/c

(being manufacturing overead cost payble)

84900

84900 6

Depreciation on Office Buildings A/c----------------------------Dr

To Office Buildings A/c

(Being Depreciation calculated on company's office builidings

8800

8800 7

Goods in Process inventory A/c-------------------------Dr

To Manufacturing Overhead cost pool A/c

(being manufacturing overhead cost applied on dierct labour cost)

82050

82050

8

Finised goods invntory A/c-----------------------------------Dr

To work- in- process inventory a/c

(being work in process goods transefered to finised goods)

91400

91400 9

Accounts Receivables A/c---------------------------------Dr

To Finised Goods Account

To Profit and Loss A/c

(Being Finished Goods sold for profit on credit)

109700

75300

34400

10

Cost of goods sold expenses a/c--------------Dr

To finised goods a/c

(to record the cost of sale)

75300

75300

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