Elder Corporation incurred the following transactions. Purchased raw materials o

Question

Elder Corporation incurred the following transactions. Purchased raw materials on account $46,300. Raw Materials of $36,000 were requisitioned to the factory. An analysis of the materials requisition slips indicated that $6,800 was classified as indirect materials. Factory labor costs incurred were $53,900, of which $49,000 pertained to factory wages payable and $4,900 pertained to employer payroll taxes payable. Time tickets indicated that $48,000 was direct labor and $5,900 was indirect labor. Overhead costs incurred on account were $80,500. Manufacturing overhead was applied at the rate of 150% of direct labor cost. Goods costing $88,000 were completed and transferred to finished goods. Finished goods costing $75,000 to manufacture were sold on account for $103,000. Instructions Journalize the transactions. (For multiple debit/credit entries, list amounts from largest to smallest e.g. 10, 5, 3, 2.)

Explanation / Answer

Description/Account Debit Credit <?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" /?>

1. Raw Material Inventory 46300

Account Payable 46300

2. WIP29200

Manufacturing overhead 6800

Raw Material Inventory 36000

3. Factory payroll 53900

Wages Payable 49000

Payroll taxes payable 4900

4. WIP48000

Manufacturing overhead 5900

Factory payroll 53900

5. Manufacturing overhead 80500

Account payable 80500

6. WIP 72000

Manufacturing overhead applied72000

7. Finished Goods 88000

WIP 88000

8 Account receivable 103000

Sales 103000

Cost of goods sold 75000

Finished goods75000

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