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Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094

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Section
BuyFindarrow_forward

Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094
Textbook Problem

Issuance of materials

On August 4, Rothchild Company purchased on account 12,000 units of raw material at $14 per unit. During August, raw materials were requisitioned for production as follows: 5,000 units for Job 40 al $8 per unit and 6,200 units for Job 42 at $14 per unit. Journalize the entry on August 4 to record the purchase and on August 31 to record the requisition from the materials storeroom.

To determine

Issuance of materials

The material storeroom releases raw materials for used in manufacturing process when a material requisition is received. The summary of material requisition aids as a basis for recording materials used in the process.

To record: Journal entry for purchase and issuance of materials.

Explanation

The journal entry is prepared as follows:

Date Account titles and Explanation Debit
($)
Credit
($)
August 04 Materials (1) 168,000  
      Accounts Payable   168,000
  (Materials purchased during May)    
       
August 30 Work in process Table (2) 126,800  
      Materials   126,800
  (Materials issued during May)    

Table (1)

Working notes:

The material purchased during the month is calculated as follows:

Materials purchased 

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