Fort Corporation had the following transactions during its first month of operat

Question

Fort Corporation had the following transactions during its first month of operations 1. Purchased raw materials on account, $85,000. 2. Raw Materials of $30,000 were requisitioned to the factory. An analys An analysis of the materials requisition slips indicated that $6,000 was classified as indirect materials labor costs incurred were $175,000 of which $145,000 pertained to factory wages payable and $30,000 pertained to employer payrol 4- Time tickets indicated that $145,000 was direct labor and $30,000 was indirect labor. 5. Overhead costs incurred on account were $198,000 6. Manufacturing overhead was applied at the rate of 150% of direct labor cost. 7. Goods costing $115,000 are still incomplete at the end of the month; the other goods were completed and transferred to finished goods 8. Finished goods costing $100,000 to manufacture were sold on account for $130,000. Journalize the above transactions for Fort Corporation. (Record journal entries in the order presented in the problem. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Debit Credit No. Account Titles and Explanation 1. 2. 3. 2 y19

Explanation / Answer

Transactions Account titles and explanation debit credit 1 raw materials inventory 85000 Accounts payable 85000 2. Work in process Inventory (30000-6000) 24000 Manufacturing overhead 6000 Raw materials inventory 30000 3. Factory Labor 175000 Factory wages payable 145000 Payroll taxes payable 30000 4. Work in process Inventory 145000 Manufacturing overhead 30000 Factory Labor 175000 5. Manufacturing overhead 198000 Accounts payable 198000 6. Work in process Inventory (145000*150%) 217500 Manufacturing overhead 217500 7. Finished goods Inventory 271500 Work in process Inventory (24000+145000+217500-115000) 271500 8. Account receivables 130000 Sales 130000 Cost of goods sold 100000 Finished goods Inventory 100000

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