Problem 1:
A Corporation had the following transactions during its first month of operations:
1. Purchased raw materials on account, $85,000
2. Raw Materials of $30,000 were requisitioned to the factory. An analysis of the materials requisition slips indicated that $6,000 was classified as indirect materials
3. Factory labor costs incurred were $125,000 of which $100,000 pertained to factory wages payable & $25,000 pertained to employer payroll taxes payable
4. Time tickets indicated that $104,000 was direct labor & $21,000 was indirect labor.
5. Overhead costs incurred on account were $112,000.
6. Manufacturing overhead was applied at the rate of 150% of direct labor cost.
7. Goods costing $135,000 are still incomplete at the end of the month; the other goods were comopleted & transferred to finished goods.
8. Finished goods costing $100,000 to manufacture were sold on account for $130,000.
Instructions:
Journalize the above transactions for the Corporation
Problem 2:
A manufacturing company produces a product in 2 departments: (1) mixing and (2) finishing. The company uses a process cost accounting system.
(a) Purchased raw materials for $50,000 on account.
(b) Raw materials requisitioned for production were:
Direct Materials
Mixing Department $20,000
Finishing Department $14,000
(c) Incurred labor costs of $80,000.
(d) Factory labor used:
Mixing Department $48,000
Finishing Department $32,000
(e) Manufacturing overhead is applied to the product based on machine hours used in each department:
Mixing Department - 600 machine hours at $45 per machine hour
Finishing Department - 500 machine hours at $30 per machine hour
(f) Units costing $66,000 were completed in the Mixing Department & were transferred to the Finishing Department.
(g) Units costing $60,000 were completed in the Finishing Department & were transferred to the finished goods.
(h) Finished goods costing $30,000 were sold on account for $45,000.
Instructions:
Prepare the journal entries to record the preceding transactions for the manufacturing company
