Exercise 16-7 Crawford Corporation incurred the following transactions. 1. Purch

Question

Exercise 16-7 Crawford Corporation incurred the following transactions. 1. Purchased raw materials on account $54,900 2. Raw Materials of $42,500 were requisitioned to the factory. An analysis of the materials requisition slips indicated that $8,400 was classified as indirect materials 4. 5. 6. 7. 8. 9. Factory labor costs incurred were $67,100, of which $50,800 pertained to factory wages payable and $16,300 pertained to employer payroll taxes payable Time tickets indicated that $54,300 was direct labor and $12,800 was indirect labor Manufacturing overhead costs incurred on account were $84,300 Depreciation on the company's office building was $8,600 Manufacturing overhead was applied at the rate of 150% of direct labor cost. Goods costing $90,400 were completed and transferred to finished goods Finished goods costing $82,300 to manufacture were sold on account for $112,700 ournalize the transactions. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Account Titles and Explanation Debit Credit

Explanation / Answer

The following are the journal entries:

no accounts and explanation debit credit 1 raw material inventory a/c 54,900 ...............To accounts payable a/c 54,900 2 Work in process inventory a/c 34,100 manufacturing overhead 8,400 ....................To raw materials inventory a/c 42,500 3 Factory labour a/c 67,100 ..............Factory wages 50,800 ..............To Payroll taxes 16,300 4 Work in process inventory a/c 54,300 Manufacturing overhead a/c 12,800 ...............To Factory overhead a/c 67,100 5 Manufacturing overhead a/c 84,300 ....................To Accounts payable a/c 84,300 6 depreciation expense a/c 8,600 ....................To accumulated depreciation a/c 8,600 7 work in process inventory a/c 81,450 .....................To manufacturing overhead a/c 81,450 (amount = 54,300*150% =>81,450) 8 Finished goods inventory a/c 90,400 ................To work in process inventory a/c 90,400 9 accounts receivable a/c 112,700 ................To sales a/c 112,700 (to record sale) cost of goods sold 82,300 .................To finished goods inventory 82,300 (to record the cost of goods sold)

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