1. Fun Boats Company produces pontoons for boats. Prepare the journal entries to

Question

1. Fun Boats Company produces pontoons for boats. Prepare the journal entries to reflect the following transactions. This problem is very similar to 8-19.06. This is for 34 points. August 4, 2017 Purchased aluminum to be used in the manufacturing process. The purchase price was $6000.00 on account. August 8, 2017 Transferred 60% of the raw materials purchased on August 4 into production. Incurred direct labor costs of $4000.00. Factory overhead is applied at 40% of the direct labor cost. August 9 Transferred completed pontoons with total assigned costs of $6600.00 to finished goods. August 10 Sold and delivered half of the finished goods (from August 9) to a customer for $6000.00 CASH.

Explanation / Answer

Aug 4 Raw Material Inventory 6000 Accounts payable 6000 Aug 8 Factory payroll 4000 Wages Payable 4000 Aug 8 Factory overhead 1600 Accounts payable 1600 Aug 8 Work in process 9200 Raw Material inventory 3600 Factory Payroll 4000 Factory overhead 1600 Aug 9 Finished goods inventory 6600 Work in process inventory 6600 (Record finished Goods) Aug 10 Cost of Goods sold 3300 Finished goods inventory 3300 Aug 10 Cash 6000 Sales 6000 (to record the sales)

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