Question

Larned Corporation recorded the following transactions for the just completed month. $74,000 in raw materials were purchased on account. $72,000 in raw materials were used in production. Of this amount, $61,000 was for direct materials and the remainder was for indirect materials. Total labor wages of $115,500 were paid in cash. Of this amount, $101,700 was for direct labor and the remainder was for indirect labor. Depreciation of $195,000 was incurred on factory equipment.

Required:
Record the above transactions in journal entries.

Answer 1

Answer:

a. Dr Raw materials $74,000

Cr Accounts payable $74,000

b. Dr Work in process 61, 000

Dr Manufacturing overhead 11,000

Cr Raw materials $72,000

c. Dr Work in process $101,700

Dr Manufacturing overhead 13800

Cr Selling and administrative expenses $115,500

d. Dr Manufacturing overhead 195,000

Cr Accumulated depreciation 195,000

Explanation:

Preparation of the journal entries

a. Dr Raw materials $74,000

Cr Accounts payable $74,000

b. Dr Work in process 61, 000

Dr Manufacturing overhead 11,000

(72,000-61,000)

Cr Raw materials $72,000

c. Dr Work in process $101,700

Dr Manufacturing overhead 13800

(115,500-101,700)

Cr Selling and administrative expenses $115,500

d. Dr Manufacturing overhead 195,000

Cr Accumulated depreciation 195,000