During the current month, Wacholz Company incurs the following manufacturing cos

Question

During the current month, Wacholz Company incurs the following manufacturing costs.

Prepare journal entries for each type of manufacturing cost. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

No.

Account Titles and Explanation

Debit

Credit

(a)

(b)

(c)

(a) Purchased raw materials of $18,000 on account. (b) Incurred factory labor of $40,000. Of that amount, $31,000 relates to wages payable and $9,000 relates to payroll taxes payable. (c) Factory utilities of $3,100 are payable, prepaid factory property taxes of $2,700 have expired, and depreciation on the factory building is $9,500.

Explanation / Answer

Journal entries No. Account Titles and Explanation Debit Credit a. Raw Material Inventory $18,000 Accounts Payable $18,000 (recording of purchase of raw material on account) b Work in process Inventory $40,000 Wages Payable $31,000 Payroll Taxes Payable $9,000 (recording of factory wages and payroll taxes incurred) c Factory Overhead $15,300 Factory Utility Expense Payable $3,100 Prepaid Factory Property Taxes $2,700 Accumulated Depreciation - Factory Building $9,500 (recording of factory overheads incurred)

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