Concept explainers
Recording
Sereno Company makes piñatas for children's birthday parties. Information's last six months of operation is listed as follows:
Required:
Prepare the
(a) Purchased $15,000 of raw materials on credit.
(b) Issued $9,200 of direct raw materials into production.
(c) Recorded $16,500 in direct labor.
(d) Applied $24,000 in manufacturing overhead.
(e) Completed piñatas costing $39,500.
(f) Recorded $16,000 in actual manufacturing overhead.
(g) Sold piñatas for $66,000 that cost $44,000 to produce.
(a)
Introduction:
Journalizing is a process identifying and recording the transactions of business in the books of accounts in a chronological order. The accountant needs to recognize and examine the transactions that affect the business and record each entry in a journal accompanied by date and description of the transaction. The entries are recorded as the debit and credit balances.
To record:
The journal entry relatedto Purchasing raw materialsof$15,600on credit.
Answer to Problem 22E
To journalize the transation:
Date | Accounts title and explanation | Post Ref. | Debit ($) | Credit ($) |
Raw material inventory | $15,600 | |||
Accounts payable | $15,600 | |||
(To record the purchase of rawmaterial on accounts) |
Explanation of Solution
The golden rules of accounting that are needed to be kept in mind for journalizing:
- Personal account: The receiver needs to be debited; the giver needs to be credited.
- Real account: What comes in needs to be debited; what goes out needs to be credited.
- Nominal account: All expenses and losses need to be debited; all incomes and gains needs to be credited.
(b)
Introduction:
Journalizing is a process identifying and recording the transactions of business in the books of accounts in a chronological order. The accountant needs to recognize and examine the transactions that affects the business and record each entry in a journal accompanied by date and description of the transaction. The entries are recorded as the debit and credit balances.
To record:
The journal entry related to issuing direct materialsof$9,200 for production.
Answer to Problem 22E
To journalize the transation:
Date | Accounts title and explanation | Post Ref. | Debit ($) | Credit ($) |
Work in process inventory | $9,200 | |||
Raw material inventory | $9,200 | |||
(To record the issues of rawmaterial of production) |
Explanation of Solution
The golden rules of accounting that are needed to be kept in mind for journalizing:
- Personal account: The receiver needs to be debited; the giver needs to be credited.
- Real account: What comes in needs to be debited; what goes out needs to be credited.
- Nominal account: All expenses and losses need to be debited; all incomes and gains needs to be credited.
(c)
Introduction:
Journalizing is a process identifying and recording the transactions of business in the books of accounts in a chronological order. The accountant needs to recognize and examine the transactions that affects the business and record each entry in a journal accompanied by date and description of the transaction. The entries are recorded as the debit and credit balances.
To record:
The journal entry of $16,500 in direct labor.
Answer to Problem 22E
To journalize the transation:
Date | Accounts title and explanation | Post Ref. | Debit ($) | Credit ($) |
Work in process inventory | $16,500 | |||
Wages payable | $16,500 | |||
(To record the labor cost incurred) |
Explanation of Solution
The golden rules of accounting that are needed to be kept in mind for journalizing:
- Personal account: The receiver needs to be debited; the giver needs to be credited.
- Real account: What comes in needs to be debited; what goes out needs to be credited.
- Nominal account: All expenses and losses need to be debited; all incomes and gains needs to be credited.
(d)
Introduction:
Journalizing is a process identifying and recording the transactions of business in the books of accounts in a chronological order. The accountant needs to recognize and examine the transactions that affects the business and record each entry in a journal accompanied by date and description of the transaction. The entries are recorded as the debit and credit balances.
To record:
The journal entry related to $24,000applied in manufacturing overhead.
Answer to Problem 22E
To journalize to transation:
Date | Accounts title and explanation | Post Ref. | Debit ($) | Credit ($) |
Work in process inventory | $24,000 | |||
Manufacture overhead | $24,000 | |||
(To record the manufacture overhead cost incurred) |
Explanation of Solution
The golden rules of accounting that are needed to be kept in mind for journalizing:
- Personal account: The receiver needs to be debited; the giver needs to be credited.
- Real account: What comes in needs to be debited; what goes out needs to be credited.
- Nominal account: All expenses and losses need to be debited; all incomes and gains needs to be credited.
(e)
Introduction:
Journalizing is a process identifying and recording the transactions of business in the books of accounts in a chronological order. The accountant needs to recognize and examine the transactions that affects the business and record each entry in a journal accompanied by date and description of the transaction. The entries are recorded as the debit and credit balances.
To record:
The journal entry related to completion of pinatas costing $39,500.
Answer to Problem 22E
To journalize to transation:
Date | Accounts title and explanation | Post Ref. | Debit ($) | Credit ($) |
Finished goods inventory | $39,500 | |||
Work in process inventory | $39,500 | |||
(To record the manufacture overhead cost incurred) |
Explanation of Solution
The golden rules of accounting that are needed to be kept in mind for journalizing:
- Personal account: The receiver needs to be debited; the giver needs to be credited.
- Real account: What comes in needs to be debited; what goes out needs to be credited.
- Nominal account: All expenses and losses need to be debited; all incomes and gains needs to be credited.
(f)
Introduction:
Journalizing is a process identifying and recording the transactions of business in the books of accounts in a chronological order. The accountant needs to recognize and examine the transactions that affects the business and record each entry in a journal accompanied by date and description of the transaction. The entries are recorded as the debit and credit balances.
To record:
The journal entry related torecording $16,000in manufacturing overhead.
Answer to Problem 22E
To journalize to transation:
Date | Accounts title and explanation | Post Ref. | Debit ($) | Credit ($) |
Manufacturing overhead | $16,000 | |||
Accounts payable | $16,000 | |||
(To record the actual manufacture overhead cost incurred) |
Explanation of Solution
The golden rules of accounting that are needed to be kept in mind for journalizing:
- Personal account: The receiver needs to be debited; the giver needs to be credited.
- Real account: What comes in needs to be debited; what goes out needs to be credited.
- Nominal account: All expenses and losses need to be debited; all incomes and gains needs to be credited.
(g)
Introduction:
Journalizing is a process identifying and recording the transactions of business in the books of accounts in a chronological order. The accountant needs to recognize and examine the transactions that affects the business and record each entry in a journal accompanied by date and description of the transaction. The entries are recorded as the debit and credit balances.
To record:
The journal entries related toselling piñatas for$66,000 that costed $44,000 to produce.
Answer to Problem 22E
To journalize to transation:
Date | Accounts title and explanation | Post Ref. | Debit ($) | Credit ($) |
Cost of goods sold | $44,000 | |||
Finishing goods inventroy | $44,000 | |||
(To record the cost of goods sold) | ||||
Date | Accounts title and explanation | Post Ref. | Debit ($) | Credit ($) |
Cash | $66,000 | |||
Sales revenue | $66,000 | |||
(To record Sales of goods) | ||||
Date | Accounts title and explanation | Post Ref. | Debit ($) | Credit ($) |
Sales revenue | $66,000 | |||
Cost of goods sold | $44,000 | |||
Profit on sales of goods | $22,000 | |||
(To record the Profit realized on sales of goods) |
Explanation of Solution
The golden rules of accounting that are needed to be kept in mind for journalizing:
- Personal account: The receiver needs to be debited; the giver needs to be credited.
- Real account: What comes in needs to be debited; what goes out needs to be credited.
- Nominal account: All expenses and losses need to be debited; all incomes and gains needs to be credited.
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Chapter 3 Solutions
WHITECOTTON MGRL ACCTG (LL)
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