Prepare summary journal entries to record the following transactions and events
ID: 2462508 • Letter: P
Question
Prepare summary journal entries to record the following transactions and events a through g for a company in its first month of operations.
Paid cash for factory payroll, $35,000. Of this total, $25,000 is for direct labor and $10,000 is for indirect labor.
Prepare journal entry for below transactions:
1. Record raw materials purchased on account .
2. Record the entry to assign costs of direct materials used.
3. Record the entry for indirect materials.
4. Record the usage of direct and indirect labor, paid in cash.
5. Record other actual overhead costs, paid in cash.
6. Record the entry to apply overhead at a rate of 120% of direct labor cost.
7. Record costs of jobs completed.
8. Record cost of sale of jobs.
9. Record sales on account.
Prepare summary journal entries to record the following transactions and events a through g for a company in its first month of operations.
Explanation / Answer
Solution:
Journal Debit Credit 1 Purchases 80,000 Accounts Payable 80,000 2 Work in progress 37,000 Raw material 37,000 3 Manufacturing overhead 12,000 Raw material 12,000 4 Work in progress 25,000 Direct Labor cost 25,000 5 Manufacturing overhead 10,000 Direct Labor cost 10,000 6 Direct Labor cost 35,000 Cash 35,000