Question

Sheridan Corporation incurred the following transactions.
1.Purchased raw materials on account $46,600.
2.Raw Materials of $40,800 were requisitioned to the factory. An analysis of the materials requisition slips indicated that $7,000 was classified as indirect materials.
3.Factory labor costs incurred on account were $83,700.
4. Time tickets indicated that $55,700 was direct labor and $4,600 was indirect labor.
5. Manufacturing overhead costs incurred on account were $83,700.
6. Depreciation on the company’s office building was $8,900.
7. Manufacturing overhead was applied at the rate of 160% of direct labor cost.
8. Goods costing $93,500 were completed and transferred to finished goods.
9. Finished goods costing $85,100 to manufacture were sold on account for $104,500.
Journalize the transactions. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Account Titles and Explanation Debit Credit (1) (2) (3) (4) (5) (6) (7) (8) (9) (To record the sale) (To record the cost of the sale)

Answer 1

Answer:

Sheridan Corporation

Journal Entries:

1. Debit Raw Materials Inventory $46,600

Credit Accounts Payable $46,600

To record purchase of raw materials on account.

2. Debit Direct Raw Materials  $33,800

Debit Indirect Raw materials $7,000

Credit Inventory $40,800

To record the requisitioning of raw materials to the factor.

4. Debit Direct labor $55,700

Debit Indirect labor $4,600

Credit Cash Account $60,300

To record labor costs incurred.

5. Debit Manufacturing Overhead $83,700

Credit Cash account $83,700

To record manufacturing overhead cost.

6. Debit Depreciation $8,900

Credit Accumulated Depreciation $8,99

To record the depreciation expense for the period.

7. Debit Manufacturing Overhead $5,420

Underapplied Manufacturing Overhead $5,420

To record underapplied manufacturing overhead.

8. Debit Finished Goods Inventory $93,500

Credit Cost of Production $93,500

To transfer completed goods.

9. Debit Cost of Goods Sold $85,100

Credit Finished Goods Inventory $85,100

To record the cost of finished goods.

Explanation:

Journal entries are made to record business transactions.  They help classified transactions according to their whether they are to be debited or credit.