1. Purchased raw materials on account, $85,000. Raw Materials of $30,000 were re
ID: 2539405 • Letter: 1
Question
1. Purchased raw materials on account, $85,000. Raw Materials of $30,000 were requisitioned to the factory. An analysis of the materials requisition slips indicated that $6,000 was classifed as indirect 3. Factory labor costs incurred were $175,000 of which $145,000 pertained to factory wages payable and $30,000 pertained to employer payroil taxes payable 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. overhead was applied at the rate of 1s@% of direct labor cost. o cosn s5,.are sirncahecompleted and tandere o nsed ps incomplete at t 8. Finished goods costing $100,000 to manufacture were sold on account for $130,000. ournalize the above transactions for Fort Corporation. (Record journal entries in the order presented in the problem. Credit account titles are automatically 2. 3. StudyExplanation / Answer
Answer:
Event
Description
Debit $
Credit $
1
Raw Materials Inventory
85000
Accounts Payable
85000
(To record the material Purchase on credit)
2
Work in Process Inventory .
24000
Manufacturing Overhead
6000
Raw Materials Inventory
30000
30000
3
Factory Labor
175000
Factory Wages Payable
145000
Employer Payroll Taxes Payable
30000
(to record the factory labor)
4
Work in Process Inventory .
145000
Manufacturing Overhead
30000
Factory Labor
175000
5
Manufacturing Overhead
198000
Accounts Payable .
198000
(to record the overhead incurred)
6
Work in Process Inventory (145,000*150%)
217500
Manufacturing Overhead
217500
($145,000 × 150% = $217,500)
(To record the manufacturing Overhead
applied )
7
Finished Goods Inventory
271500
Work in Process Inventory
271500
($24,000 + $145,000 + $217,500 = $386,500)
($386,500 – $115,000 = $271,500)
(to record the goods transffered to finished
goods accounts)
8
Accounts Receivable
130000
Sales Revenue
130000
Cost of Goods Sold
100000
Finished Goods Inventory
100000
(to record the good sold and cost of goods
sold)
Event
Description
Debit $
Credit $
1
Raw Materials Inventory
85000
Accounts Payable
85000
(To record the material Purchase on credit)
2
Work in Process Inventory .
24000
Manufacturing Overhead
6000
Raw Materials Inventory
30000
30000
3
Factory Labor
175000
Factory Wages Payable
145000
Employer Payroll Taxes Payable
30000
(to record the factory labor)
4
Work in Process Inventory .
145000
Manufacturing Overhead
30000
Factory Labor
175000
5
Manufacturing Overhead
198000
Accounts Payable .
198000
(to record the overhead incurred)
6
Work in Process Inventory (145,000*150%)
217500
Manufacturing Overhead
217500
($145,000 × 150% = $217,500)
(To record the manufacturing Overhead
applied )
7
Finished Goods Inventory
271500
Work in Process Inventory
271500
($24,000 + $145,000 + $217,500 = $386,500)
($386,500 – $115,000 = $271,500)
(to record the goods transffered to finished
goods accounts)
8
Accounts Receivable
130000
Sales Revenue
130000
Cost of Goods Sold
100000
Finished Goods Inventory
100000
(to record the good sold and cost of goods
sold)
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