Selected information from Skylar Studios shows the following:

Raw materials purchased	$6,000
Direct materials	$1,500
Direct labor	$11,000
Factory depreciation	$1,000
Total manufacturing overhead incurred	$12,800
Machine hours per month	27,000
Unit cost for material	$2
Unit cost of conversion	$8
Number of units transferred	16,000

If an amount box does not require an entry, leave it blank.

A. Prepare journal entry to record the raw material purchased.

	Accounts PayableAccounts ReceivableCashRaw Materials InventoryWork in Process	- Select -	- Select -
	Accounts PayableAccounts ReceivableCashRaw Materials InventoryWork in Process	- Select -	- Select -

B. Prepare journal entry to record direct labor incurred.

	Accounts ReceivableCashWages PayableWork in Process 1Work in Process 2	- Select -	- Select -
	Accounts ReceivableCashWages PayableWork in Process 1Work in Process 2	- Select -	- Select -

C. Prepare journal entry to record depreciation expense (hint: this is part of manufacturing overhead).

	Accounts ReceivableAccumulated DepreciationFinished GoodsManufacturing OverheadRaw Materials Inventory	- Select -	- Select -
	Accounts ReceivableAccumulated DepreciationFinished GoodsManufacturing OverheadRaw Materials Inventory	- Select -	- Select -

D. Prepare journal entry to record raw materials used.

	Accounts ReceivableFinished GoodsManufacturing OverheadRaw Materials InventoryWork in Process 1	- Select -	- Select -
	Accounts ReceivableFinished GoodsManufacturing OverheadRaw Materials InventoryWork in Process 1	- Select -	- Select -

E. Prepare journal entry to record overhead applied on the basis of $0.40 per machine hour.

	Accounts ReceivableFinished GoodsManufacturing OverheadRaw Materials InventoryWork in Process 1	- Select -	- Select -
	Accounts ReceivableFinished GoodsManufacturing OverheadRaw Materials InventoryWork in Process 1	- Select -	- Select -

F. Prepare journal entry to record the transfer from department 1 to department 2.

	Accounts ReceivableFinished GoodsManufacturing OverheadWork in Process 1Work in Process 2	- Select -	- Select -
	Accounts ReceivableFinished GoodsManufacturing OverheadWork in Process 1Work in Process 2	- Select -	- Select -

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