The following events occurred during the month of June at the Phipps Company, manufacturers of golf clubs. Prepare the appropriate journal entries. Phipps uses the gross price method and the perpetual inventory system.
1. Purchased $ 55,000 of direct materials and $ 45,000 of indirect materials (supplies), both on account.
2. Sold 10,000 shares of capital stock for $ 50,000.
3. Direct materials of $ 60,000 were issued into production.
4. Indirect materials of $ 45,000 were issued into production.
5. Collected $ 12,000 on accounts receivable.
6. Paid $ 31,000 in wages to employees: $ 17,000 was direct labor and $ 14,000 was indirect labor. (Ignore payroll taxes.)
7. Paid the electricity bill for the factory when received, $ 3,000.
8. Manufacturing overhead of $ 54,000 was applied to production.
9. Paid selling and administrative expenses of $ 17,000.
10. Paid $ 32,000 in wages to employees: $ 18,000 was direct labor and $ 14,000 was indirect labor. (Ignore payroll taxes.)
11. Manufacturing overhead of $ 63,000 was applied to production.
12. Completed jobs costing $ 175,000.