Explanation Pass the journal entries to record the transactions Purchase of raw material: Company purchased raw materials worth of $70,700 which includes purchase of canvas of $70,000 and purchase of thread of $700. Whenever company purchases raw material, raw material inventory account and accounts payable account will be impacted. Raw material inventory account is an asset account and with the purchase transaction its balance will increase therefore, it will be debited in the books. Accounts payable is a liability account and its balance will increase with the purchases, therefore it will be credited. The credit balance of accounts payable shows the amount that company owes to its suppliers. Date Accounting title and explanation Post Ref Debit ($) Credit ($) Raw materials inventory $70,700 (Canvas: $70,000 and thread: $700) Accounts Payable $70,700 (to record purchase of raw materials on account) Table (1) Material requisitioned from the store to production facility: Whenever production managers need some raw material they fill out the material requisition to the store room. After receiving material requisition, storeroom will pick up those raw materials and send it to the factory. Once the material sent into production, they become the part of work in process inventory. The cost of these materials moved out of raw material inventory account to work in process inventory account. Both raw material inventory and work in process inventory are asset account. Raw material inventory accounts balance is decreasing as materials moved out of the raw material inventory, therefore, it will be credited. Whereas work in process inventory account balance is increasing as materials moved in production, therefore, it will be debited...

Managerial Accounting, Student Value Edition Plus MyLab Accounting with Pearson eText -- Access Card Package (5th Edition)

5th Edition

ISBN: 9780134642093

Author: Karen W. Braun, Wendy M. Tietz

Publisher: PEARSON

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Chapter 3, Problem 3.12SE

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To prepare: Prepare the journal entries to record the transactions and prepare the raw material inventory account. Also determine the ending balance of raw material inventory account.

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Managerial Accounting, Student Value Edition Plus MyLab Accounting with Pearson eText -- Access Card Package (5th Edition)

Ch. 3 - (Learning Objective 1) For which of the following...Ch. 3 - (Learning Objective 2) Which of the following...Ch. 3 - (Learning Objective 2) Which of the following...Ch. 3 - (Learning Objective 3) The amount of manufacturing...Ch. 3 - (Learning Objective 4) Which of the following is...Ch. 3 - (Learning Objective 5) Which of the following is...Ch. 3 - (Learning Objective 5) Assuming the amount of...Ch. 3 - Prob. 8QC Ch. 3 - Prob. 9QC Ch. 3 - Prob. 10QC

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Prepare the journal entries to record the transactions and prepare the raw material inventory account. Also determine the ending balance of raw material inventory account.

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To prepare: Prepare the journal entries to record the transactions and prepare the raw material inventory account. Also determine the ending balance of raw material inventory account.

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