Business, 29.01.2021 16:50 loveashley1

Prepare summary journal entries to record the following transactions for a company in its first month of operations. Raw materials purchased on account, $114,000.
Direct materials used in production, $45,500. Indirect materials used in production, $20,400.
Paid cash for factory payroll, $50,000. Of this total, $37,000 is for direct labor and $13,000 is for indirect labor.
Paid cash for other actual overhead costs, $9,125.
Applied overhead at the rate of 125% of direct labor cost.
Transferred cost of jobs completed to finished goods, $80,500.
Sold jobs on account for $115,000. The jobs had a cost of $80,500.
a. Record raw materials purchased on account .

b(1). Record the entry to assign costs of direct materials used.

b(2). Record the entry for indirect materials.

c. Record the usage of direct and indirect labor, paid in cash.

d. Record other actual overhead costs, paid in cash.

e. Record the entry to apply overhead at a rate of 125% of direct labor cost.

f. Record costs of jobs completed.

g(1). Record the cost of the jobs sold.

g(2). Record sales on account.

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Answer from: obliviousho2018

1a. Dr Raw materials inventory $114,000

Cr Accounts payable $114,000

b(1) Dr Work in process inventory $45,500

Cr Raw materials inventory$45,500

b(2) Dr Factory overhead $20,400

Cr Raw materials inventory$20,400

c.Dr Work in process inventory 37,000

Dr Factory overhead 13,000

Cr Cash 50,000

d. Dr Factory overhead 9,125

Cr Cash 9,125

e. Dr Work in process inventory 45,500

Cr Factory overhead45,500

f. Dr Finished goods inventory $80,500

Cr Work in process inventory$80,500

g(1) Dr Cost of goods sold$80,500

Cr Finished goods inventory $80,500

g(2) Dr Accounts receivable $115,000

Cr Sales $115,000

Explanation:

Preparation of summary journal entries

1a. Dr Raw materials inventory $114,000

Cr Accounts payable $114,000

(Being to record raw materials purchased on account )

b(1) Dr Work in process inventory $45,500

Cr Raw materials inventory$45,500

(Being to Record the entry to assign costs of direct materials used)

b(2) Dr Factory overhead $20,400

Cr Raw materials inventory$20,400

(Being to record the entry for indirect materials)

c.Dr Work in process inventory 37,000

Dr Factory overhead 13,000

Cr Cash 50,000

(Being to Record the usage of direct and indirect labor, paid in cash)

d. Dr Factory overhead 9,125

Cr Cash 9,125

(Being to Record other actual overhead costs, paid in cash)

e. Dr Work in process inventory 45,500

Cr Factory overhead45,500

(Being to Record the entry to apply overhead)

f. Dr Finished goods inventory $80,500

Cr Work in process inventory$80,500

(Being to Record costs of jobs completed)

g(1) Dr Cost of goods sold$80,500

Cr Finished goods inventory $80,500

(Being to Record the cost of the jobs sold)

g(2) Dr Accounts receivable $115,000

Cr Sales $115,000

(Being to Record sales on account)

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