Finn Manufacturing Company uses a job order cost accounting system and keeps per
ID: 2333365 • Letter: F
Question
Finn Manufacturing Company uses a job order cost accounting system and keeps perpetual inventory records. Prepare journal entries to record the following transactions during the month of June. June 1. Purchased raw materials for $20,000 on account. June 8 Raw materials requisitioned by peoduction: Direct materials $8,000 Indirect materials $1,000 June 15 Paid factory utilities, $2,100 and repairs for factory equipment, $8,000. June 25 Incurred $108,000 of factory labor. June 25 Time tickets indicated the following: Direct labor (7,000 hrs x $12 per hour) = $84,000 Indirect Labor (3,000 hrs x $8 per hour) = 24,000 June 25 Applied manufacturing overhead to production based on a predetermined overhead rate of $7 per direct labor hour worked. June 28 Goods costing $18,000 were completed in the factory and were transferred to finished goods. June 30 Goods costing $15,000 were sold for $20,000 on account. .Finn Manufacturing Company uses a job order cost accounting system and keeps perpetual inventory records. Prepare journal entries to record the following transactions during the month of June. 1 8 Purchased raw materials for $20,000 on account. Raw materials requisitioned by production: June Direct materials Indirect materials $8,000 1,000 15 Paid factory utilities, $2,100 and repairs for factory equipment, $8,000. 25 Incurred $108,000 o factory labor. 25 Time tickets indicated the following: Direct Labor (7,000 hrs × $12 per hr) $84,000 = Indirect Labor (3,000 hrs x $8 per hr) 24.000 $108.000 25 28 30 Applied manufacturing overhead to production based on a predetermined overhead rate of $7 per direct labor hour worked. Goods costing $18,000 were completed in the factory and were transferred to finished goods. Goods costing $15,000 were sold for $20,000 on account.Explanation / Answer
1. Finn Manufacturing purchased raw materials at a cost of $ 20,000
June, 1st
Material Inventrory (Dr.) $20,000
Account Payable (Cr). $20,000
2. $8,000 worth of raw materials were used in the project as direct materials.
June, 8th
Work in process (Dr.) $8,000
Inventrories (Cr.) $8,000
3. $1,000 worth of raw materials were used as indirect materials.
June, 8th
Manufacturing overheads (Dr.) $1,000
Inventories (Cr.) $1,000
4. Paid Factory Utilities worth $2,100 and Repair for Factory Equipment worth $8,000
June, 15
Factory Utilities (Dr.) $21,00
Repair & Maintenece A/c (Dr.) $8,000
Cash (Cr.) $10,100
5. Factory Labour Paid
June, 25
Factory Labour (Dr.) $10,8000
Cash (Cr.) $10,8000
6. Time Ticket Indicated the Following:
June, 25
Direct Labour (Dr.) $84,000
Indirect Labour (Dr.) $24,000
Factory Labour (Cr.) $10,8000
7. Manufacturing Overheads costs incurred on were Direct Labour (7*7,000)= 49,000
June, 25
Work in Process Inventory (Dr.) $49,000
Manufacturing Overheads (Cr.) $49,000
8. Goods costing $18,000 is transferred from work in process to finished goods on its completion
June, 28
Finished goods (Dr.) $18,000
Work in process (Cr.) $18,000
9. Cost of Goods $15,000 transferred from Finished Goods and were sold for $20,000 on account
June, 30
Cost of Goods sold (Dr.) $15,000
Finished Goods (Cr.) $15,000
Account Receivable (Dr.) $20,000
Sale A/c (Cr.) $20,000
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