Question

During January, its first month of operations, Knox Company accumulated the following manufacturing costs: raw materials $4000 on account, factory labor $6000 of which $5200 relates to factory wages payable and $800 relates to payroll taxes payable and utilities payable $2000. Prepare journal entries for each type of manufacturing cost.

Answer 1

Answer:

The journal entries are as follows:

(a)  raw materials $4000 on account

Material inventory A/c   Dr.  $4,000

To Accounts payable A/c              $4,000

(b) Factory labor $6000 of which $5200 relates to factory wages payable and $800 relates to payroll taxes payable

Work in process A/c        Dr.   $6000

To Factory wages payable                         $5,200

To Payroll taxes payable                             $800

(c)  utilities payable $2000

Factory overhead A/c        Dr.   $2000

To Utilities payable                                 $2000