2 es its products by a continubus process involving three preduction departaents

Question

2 es its products by a continubus process involving three preduction departaents, 1 through . Present entries to record the folloving selected transactions related to production during August: d on account, $136,850. [b) Naterial roquisitioned for use in Departaant 1, $130,100, of which c) Labor cost Id) F $326,500 entared directly into the product directly in the aanufacture of the product. in Departaent 1, $166,300, of which $154,000 was used ovarhead costs for Departaent i incurred on account, $49,600. ation on nachinery in Departsent 1. $22,100. t) Epiration of prepaid insurance chargeable to Departaent 1, $8,200. g) Factery overhead applied to production, $84,700. a) output of Department i transferred to Departaent 2, $346,400.

Explanation / Answer

Journal entries: S.no. Accounts title and explanations Debit $ Credit $ a. Raw material Inventory Dr. 136,850        Accounts payable Account 136,850 b. Work in Process Inventory-Deptt1 Dr. 126500 factory Overheads Account Dr. 3600       Raw material inventory 130,100 c. Work in Process Inventory-Deptt1 Dr. 154,000 factory Overheads Account Dr. 12,300      Wages payable 166,300 d. factory Overheads Account Dr. 49600       Accounts payable 49600 e. factory Overheads Account Dr. 22,100        Accumulated depreciation 22,100 f. Factory Overheads Account Dr. 8200       Prepaid insurance 8200 g Work in process inventory-Deptt1 Dr. 84700        factory overheads 84700 h. Work in process Inventory Deptt2 Dr. 346,400      Work in process Inventory Deptt 1 346,400

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