Prepare summary journal entries to record the following transactions for a company in its first month of operations. Raw materials purchased on account, $90,000. Direct materials used in production, $36,500. Indirect materials used in production, $19,200. Paid cash for factory payroll, $50,000. Of this total, $38,000 is for direct labor and $12,000 is for indirect labor. Paid cash for other actual overhead costs, $11,475. Applied overhead at the rate of 125% of direct labor cost. Transferred cost of jobs completed to finished goods, $56,800. Sold jobs on account for $82,000 g(2).  The jobs had a cost of $56,800 g(1).

Question

Prepare summary journal entries to record the following transactions for a company in its first month of operations.

  1. Raw materials purchased on account, $90,000.
  2. Direct materials used in production, $36,500. Indirect materials used in production, $19,200.
  3. Paid cash for factory payroll, $50,000. Of this total, $38,000 is for direct labor and $12,000 is for indirect labor.
  4. Paid cash for other actual overhead costs, $11,475.
  5. Applied overhead at the rate of 125% of direct labor cost.
  6. Transferred cost of jobs completed to finished goods, $56,800.
  7. Sold jobs on account for $82,000 g(2).  The jobs had a cost of $56,800 g(1).

 

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