Prepare journal entries for the following transactions during the month of Febru
ID: 2531510 • Letter: P
Question
Prepare journal entries for the following transactions during the month of February 2007.
a. Raw materials were purchased, $20,000.
b. Raw materials of $25,000 were requisitioned for use in production, $10,000 for Job # MSM-1; $4,000 for Job # MSM-2 and $1,000 was for indirect materials.
c. The following labor hours and costs were incurred:
Job # MSM-1 - 50 hours at a total cost of $10,000
Job # MSM-2 - 250 hours at a total cost of $5,000
Indirect labor in the Factory operations - 200 hours at a total cost of $3,000
Selling & Administrative salaries at a total cost of $10,000.
d. Selling & Administrative expense of $13,000.
e. Factory utility costs, $12,000.
f. Depreciation expense for the month was a total of $10,000. Of this amount $6,000 is related to factory operations and $4,000 is related to selling & administrative activities.
Explanation / Answer
a) Raw materials 20000 Accounts payable 20000 b) WIP Inventory 14000 Manufacturing overhead 11000 Raw materials 25000 Note: The figures given for the two jobs and indirect materials do not total to $25000. Hence, indirect materials has been taken as $11000. Please refer the correct figures and amend the entry accordingly. c) WIP Inventory 15000 Manufacturing overhead 3000 Salaries expense-Selling and administration 10000 Wages and salaries payable 28000 d) Selling and administrative expense 13000 Cash 13000 e) Manufacturing overhead 12000 Cash 12000