1. Purchased $87,360 in materials on account. 2. Issued $3,730 in supplies from the materials inventory...

 

Transcribed Image Text:

1. Purchased $87,360 in materials on account. 2. Issued $3,730 in supplies from the materials inventory to the production department. 3. Issued $43,760 in direct materials to the production department. 4. Paid for the materials purchased in transaction (1). 5. Incurred wage costs of $67,840, which were debited to Payroll, a temporary account. Of this amount, $22,460 was withheld for payroll taxes and credited to Payroll Taxes Payable. The remaining $45,060 was paid in cash to the employees. See transactions (6) and (7) for additional information about Payroll. 6. Recognized $34,860 in fringe benefit costs, incurred as a result of the wages paid in (5). This $34,860 was debited to Payroll and credited to Fringe Benefits Payable. 7. Analyzed the Payroll account and determined that 65 percent represented direct labor; 15 percent, indirect manufacturing labor; and 20 percent, administrative and marketing costs. 8. Applied overhead on the basis of 140 percent of direct labor costs. 9. Paid for utilities, power, equipment maintenance, and other miscellaneous items for the manufacturing plant totaling $41,460. 10. Recognized depreciation of $26,460 on manufacturing property, plant, and equipment. Required: a. Prepare journal entries to record these transactions. b. The balances that appeared in the accounts of Edwin Parts are shown as follows. Materials Inventory Work-in-Process Inventory Finished Goods Inventory Cost of Goods Sold Beginning $ 90,060 25,560 102,760 Ending ? ? $ 93,360 156,400 Debit Beginning Balance Goods Sold Ending Balance Cost of Goods Sold Credit Beginning Balance Ending Balance Debit Accumulated Depreciation Property, Plant, and Equipment Credit Ending Balance Debit Beginning Balance Fringe Benefits Payable Credit Beginning Balance Ending Balance Debit Ending Balance Administrative and Marketing Costs Beginning Balance Goods Completed Debit Finished Goods Credit Credit CGS Beginning Balance Ending Balance Debit Ending Balance Debit Beginning Balance Accounts Payable Payroll Credit Credit Beginning Balance Ending Balance Debit Ending Balance Debit Beginning Balance Cash Payroll Taxes Payable Credit Credit Prepare T-accounts to show the flow of costs during the period. Materials Inventory Debit Beginning Balance Ending Balance Manufacturing Overhead Control Debit Credit Beginning Balance Credit Beginning Balance Ending Balance Debit Ending Balance Debit Beginning Balance Work-in-Process Inventory Credit Goods Completed Applied Manufacturing Overhead Credit Journal entry worksheet < A B Record depreciation of $26,460 on manufacturing plant and equipment. C D E F G H Note: Enter debits before credits. Transaction 10 Record entry General Journal Clear entry Debit Credit View general journal Journal entry worksheet < A B C D E F G H Record payment of $41,460 for utilities, maintenance, etc. Note: Enter debits before credits. Transaction 9 Record entry General Journal Clear entry | Debit Credit View general journal Journal entry worksheet <A B C Note: Enter debits before credits. Transaction 8 D E F G Record application of manufacturing overhead at 140% of direct labor cost. Record entry General Journal H Clear entry | Debit Credit View general journal Journal entry worksheet <A B C D E F G Note: Enter debits before credits. Record payroll cost of which 65% represents direct labor, 15% indirect manufacturing labor and 20% administrative and marketing costs. Transaction 7 Record entry General Journal H Clear entry I J Debit Credit View general journal Journal entry worksheet < A B C D Note: Enter debits before credits. Transaction 6 E Record entry to recognize fringe benefit cost of $34,860. Record entry F General Journal Clear entry G H I J Debit Credit View general journal > Journal entry worksheet <A B C D Note: Enter debits before credits. Record wage cost incurred $67,840 of which $22,460 was payable as taxes. Transaction 5 E Record entry F G H I J General Journal Clear entry Debit Credit View general journal Journal entry worksheet < A B C Note: Enter debits before credits. Record payment made for $87,360 purchase on account. Transaction 4 D Record entry E F G H General Journal Clear entry I J Debit Credit View general journal > Journal entry worksheet <A B C Record issue of $43,760 direct materials to production department. Note: Enter debits before credits. Transaction 3 D E F G H I J Record entry General Journal Clear entry Debit Credit View general journal Journal entry worksheet < A B Transaction 2 C Record the issuance of 3,730 in supplies from the materials inventory. Note: Enter debits before credits. Record entry D E F G H I J General Journal Clear entry Debit Credit View general journal Journal entry worksheet A B C D E F G H I J Record materials purchases of $87,360 on account. Note: Enter debits before credits. Transaction 1 Record entry General Journal Clear entry Debit Credit View general journal > 1. Purchased $87,360 in materials on account. 2. Issued $3,730 in supplies from the materials inventory to the production department. 3. Issued $43,760 in direct materials to the production department. 4. Paid for the materials purchased in transaction (1). 5. Incurred wage costs of $67,840, which were debited to Payroll, a temporary account. Of this amount, $22,460 was withheld for payroll taxes and credited to Payroll Taxes Payable. The remaining $45,060 was paid in cash to the employees. See transactions (6) and (7) for additional information about Payroll. 6. Recognized $34,860 in fringe benefit costs, incurred as a result of the wages paid in (5). This $34,860 was debited to Payroll and credited to Fringe Benefits Payable. 7. Analyzed the Payroll account and determined that 65 percent represented direct labor; 15 percent, indirect manufacturing labor; and 20 percent, administrative and marketing costs. 8. Applied overhead on the basis of 140 percent of direct labor costs. 9. Paid for utilities, power, equipment maintenance, and other miscellaneous items for the manufacturing plant totaling $41,460. 10. Recognized depreciation of $26,460 on manufacturing property, plant, and equipment. Required: a. Prepare journal entries to record these transactions. b. The balances that appeared in the accounts of Edwin Parts are shown as follows. Materials Inventory Work-in-Process Inventory Finished Goods Inventory Cost of Goods Sold Beginning $ 90,060 25,560 102,760 Ending ? ? $ 93,360 156,400 Debit Beginning Balance Goods Sold Ending Balance Cost of Goods Sold Credit Beginning Balance Ending Balance Debit Accumulated Depreciation Property, Plant, and Equipment Credit Ending Balance Debit Beginning Balance Fringe Benefits Payable Credit Beginning Balance Ending Balance Debit Ending Balance Administrative and Marketing Costs Beginning Balance Goods Completed Debit Finished Goods Credit Credit CGS Beginning Balance Ending Balance Debit Ending Balance Debit Beginning Balance Accounts Payable Payroll Credit Credit Beginning Balance Ending Balance Debit Ending Balance Debit Beginning Balance Cash Payroll Taxes Payable Credit Credit Prepare T-accounts to show the flow of costs during the period. Materials Inventory Debit Beginning Balance Ending Balance Manufacturing Overhead Control Debit Credit Beginning Balance Credit Beginning Balance Ending Balance Debit Ending Balance Debit Beginning Balance Work-in-Process Inventory Credit Goods Completed Applied Manufacturing Overhead Credit Journal entry worksheet < A B Record depreciation of $26,460 on manufacturing plant and equipment. C D E F G H Note: Enter debits before credits. Transaction 10 Record entry General Journal Clear entry Debit Credit View general journal Journal entry worksheet < A B C D E F G H Record payment of $41,460 for utilities, maintenance, etc. Note: Enter debits before credits. Transaction 9 Record entry General Journal Clear entry | Debit Credit View general journal Journal entry worksheet <A B C Note: Enter debits before credits. Transaction 8 D E F G Record application of manufacturing overhead at 140% of direct labor cost. Record entry General Journal H Clear entry | Debit Credit View general journal Journal entry worksheet <A B C D E F G Note: Enter debits before credits. Record payroll cost of which 65% represents direct labor, 15% indirect manufacturing labor and 20% administrative and marketing costs. Transaction 7 Record entry General Journal H Clear entry I J Debit Credit View general journal Journal entry worksheet < A B C D Note: Enter debits before credits. Transaction 6 E Record entry to recognize fringe benefit cost of $34,860. Record entry F General Journal Clear entry G H I J Debit Credit View general journal > Journal entry worksheet <A B C D Note: Enter debits before credits. Record wage cost incurred $67,840 of which $22,460 was payable as taxes. Transaction 5 E Record entry F G H I J General Journal Clear entry Debit Credit View general journal Journal entry worksheet < A B C Note: Enter debits before credits. Record payment made for $87,360 purchase on account. Transaction 4 D Record entry E F G H General Journal Clear entry I J Debit Credit View general journal > Journal entry worksheet <A B C Record issue of $43,760 direct materials to production department. Note: Enter debits before credits. Transaction 3 D E F G H I J Record entry General Journal Clear entry Debit Credit View general journal Journal entry worksheet < A B Transaction 2 C Record the issuance of 3,730 in supplies from the materials inventory. Note: Enter debits before credits. Record entry D E F G H I J General Journal Clear entry Debit Credit View general journal Journal entry worksheet A B C D E F G H I J Record materials purchases of $87,360 on account. Note: Enter debits before credits. Transaction 1 Record entry General Journal Clear entry Debit Credit View general journal >

Answer rating: 100% (QA)

TR General Journal Debit Credit 1 Raw materials inventory 8736000 Accounts payable 8736000 2 manufac... View the full answer