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
Asked Mar 17, 2019

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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Expert Answer

Step 1

Journal Entry: A journal entry, in accounting, is the logging of a transaction in an accounting journal that demonstrates a company's charge and credit balances. The total of the charges must equal the total of the credits or the journal entry is viewed as unbalanced.

Step 2

Pass journal entry     

Date

Particular

L.f

Debit ($)

Credit ($)

1.

Raw material inventory

       Accounts payable

To record the raw material purchase for production

 

90,000

 

90,000

2.

Work-in-process

      Raw material inventory

(To record the Direct ram material used for the production)

 

Factory overhead

      Raw material

(To record the indirect ram material used for the production)

 

36,500

 

 

 

19,200

 

36,500

 

 

 

19,200

3.

Factory payroll

     Cash

(To record the payment of factory payroll)

 

Work-in-process

       Factory payroll

(To record the direct labor expense)

 

Factory overhead

     Factory payroll

(To record the indirect labor expense)

 

50,000

 

 

 

38,000

 

 

 

12,000

 

50,000

 ...

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