Schrager Company has two production departments: Cutting and Assembly. July 1 in

Question

Schrager Company has two production departments: Cutting and Assembly. July 1 inventories are Raw Materials $4,470, Work in Process—Cutting $3,140, work in Process—Assembly $11,040, and Finished Goods $32,080. During July, the following transactions occurred.

Journalize 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.

3.

4.

5.

6.

7.

8.

9.

1. Purchased $62,930 of raw materials on account. 2. Incurred $61,140 of factory labor. (Credit Wages Payable.) 3. Incurred $71,130 of manufacturing overhead; $41,140 was paid and the remainder is unpaid. 4. Requisitioned materials for Cutting $16,680 and Assembly $9,710. 5. Used factory labor for Cutting $34,540 and Assembly $26,600. 6. Applied overhead at the rate of $19 per machine hour. Machine hours were Cutting 1,730 and Assembly 1,800. 7. Transferred goods costing $69,410 from the Cutting Department to the Assembly Department. 8. Transferred goods costing $135,150 from Assembly to Finished Goods. 9. Sold goods costing $151,360 for $201,250 on account.

Explanation / Answer

Journal Entries of Schrager Company:

S No

Particulars

Debit

Credit

1

Raw materials a/c                                   Dr

      To Accounts Payable a/c

[Raw Materials purchased on account]

$62930

$62930

2

Wages a/c                                                  Dr

     To Wages Payable a/c

[Factory Labor incurred]

$61140

$61140

3

Manufacturing Overheads a/c                Dr

      To Cash a/c

      To Overheads Payable a/c

[Manufacturing Overheads incurred]

$71130

$41140

$29990

4

Cutting Division a/c                                 Dr

Assembly Division a/c                             Dr

     To Raw Materials a/c

[Requisitioned materials for cutting and assembly]

$16680

$9710

$26390

5

Cutting Division a/c                                      Dr

Assembly Division a/c                               Dr

        To Wages a/c

[Factory labor used for cutting and assembly]

$34540

$26600

$61140

6

Cutting Division a/c (1730 *19)                  Dr

Assembly Division a/c (1800 * 19)                Dr

        To Manufacturing Overheads a/c

[Manufacturing Overheads applied for cutting and assembly]

$32870

$34200

$67070

7

Assembly Division a/c                                       Dr

         To Cutting Division

[Goods transferred from cutting to assembly]

$69410

$69410

8

Finished Goods a/c                                           Dr

         To Assembly Division a/c

[Goods transferred from assembly to finished goods]

$135150

$135150

9

Cost of Goods Sold a/c                                     Dr

         To Finished Goods a/c

[Cost of Goods Sold recorded]

$151360

$151360

Accounts Receivable a/c                              Dr

         To Sales a/c

[Sale of goods recorded]

$201250

$201250

S No

Particulars

Debit

Credit

1

Raw materials a/c                                   Dr

      To Accounts Payable a/c

[Raw Materials purchased on account]

$62930

$62930

2

Wages a/c                                                  Dr

     To Wages Payable a/c

[Factory Labor incurred]

$61140

$61140

3

Manufacturing Overheads a/c                Dr

      To Cash a/c

      To Overheads Payable a/c

[Manufacturing Overheads incurred]

$71130

$41140

$29990

4

Cutting Division a/c                                 Dr

Assembly Division a/c                             Dr

     To Raw Materials a/c

[Requisitioned materials for cutting and assembly]

$16680

$9710

$26390

5

Cutting Division a/c                                      Dr

Assembly Division a/c                               Dr

        To Wages a/c

[Factory labor used for cutting and assembly]

$34540

$26600

$61140

6

Cutting Division a/c (1730 *19)                  Dr

Assembly Division a/c (1800 * 19)                Dr

        To Manufacturing Overheads a/c

[Manufacturing Overheads applied for cutting and assembly]

$32870

$34200

$67070

7

Assembly Division a/c                                       Dr

         To Cutting Division

[Goods transferred from cutting to assembly]

$69410

$69410

8

Finished Goods a/c                                           Dr

         To Assembly Division a/c

[Goods transferred from assembly to finished goods]

$135150

$135150

9

Cost of Goods Sold a/c                                     Dr

         To Finished Goods a/c

[Cost of Goods Sold recorded]

$151360

$151360

Accounts Receivable a/c                              Dr

         To Sales a/c

[Sale of goods recorded]

$201250

$201250

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