Thal Engineering has its factory located at Gharo and has its head office at Shaheed e Millat Road Karachi. Following are the selected transactions from the record of Thal Engineering for the month of October 2018: 

i.Direct material of Rs 20 Million was purchased on account.

ii.The factory payroll for Rs 4.5 Million Direct labor and Rs 0.9 Million was mailed to the head office. The head office payroll was Rs 1.5 Million for Marketing and Sales Salaries and Rs 2.1 Million for Administrative Salaries. Employee payroll deductions were recorded at the home office at these rates; 6.5% for FICA tax; 18% for Federal Income Tax.

iii.Employer payroll tax expense is recorded at the home office. State unemployment tax rate 1.8%; Federal unemployment tax rate 0.7%.

iv.Direct material of Rs. 8000 was returned to store room and defective raw material of Rs. 25000 was returned to the supplier which was purchased on account.

v.Depreciation on machinery amounting to Rs. Rs 100,000, and other factory expenses paid amounting to Rs. 245,000

vi.Goods completed with a total cost of Rs 200 Million were transferred to finished goods.

vii.Sales were Rs 180 Million costing Rs 127 Million to produce.

Required

Make general entries to record the above transactions

Answer rating: 100% (QA)

Here are the journal entries to record the transactions of Thal Engineering for the month of October ... View the full answer