Exercise 3-4 Schrager Company has two production departments: Cutting and Assemb

Question

Exercise 3-4 Schrager Company has two production departments: Cutting and Assembly. July 1 inventories are Raw Materials $4,300, Work in Process-Cutting $3,700, Work in Process-Assembly $11,000, and Finished Goods $33,000. During July, the following transactions occurred 1. Purchased $64,000 of raw materials on account. 2. Incurred $61,100 of factory labor. (Credit Wages Payable.) 3. Incurred $73,000 of manufacturing overhead; $42,200 was paid and the remainder is unpaid 4. Requisitioned materials for Cutting $15,900 and Assembly $9,000 5. Used factory labor for Cutting $33,500 and Assembly $27,600. 6. Applied overhead at the rate of $21 per machine hour. Machine hours were Cutting 1,690 and Assembly 1,780 7. Transferred goods costing $69,160 from the Cutting Department to the Assembly Department. 8. Transferred goods costing $136,600 from Assembly to Finished Goods 9. Sold goods costing $152,400 for $202,200 on account. ournalize the transactions. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Account Titles and Explanation Debit Credit 1. 2.

Explanation / Answer

S.no. Accounts title and explanation Debit $ Credit $ 1 Raw material Inventory Account Dr. 64000     Accounts payable 64000 2 Factory labour Dr. 61100    Wages payable account 61100 3 Manufacturing Overheads account Dr. 73000     Cash account 42200     Accounts payable 30800 4 Work in process-Cutting 15900 Work in process-Assembly 9000       Raw material inventory 24900 5 Work in process-Cutting 33500 Work in process-Assembly 27600       Factory labour 61100 6 Work in process-Cutting 35490 Work in process-Assembly 37380       Manufacturing OH 72870 7 Work in process-Assembly Dr. 69160     Work in process-cutting Dr. 69160 8 Finished Goods inventory Dr. 136600     Work in procecss-Assembly 136600 9 Accounts receivable Dr. 202000       Sales revenue 202000 Cost of Goods sold Dr. 152400      Finished Goods inventory 152400

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