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Prepare summary journal entries to record the following transactions for a company in its first month...

Prepare summary journal entries to record the following transactions for a company in its first month of operations.

a. Raw materials purchased on account, $90,000.
b. Direct materials used in production, $39,500. Indirect materials used in production, $18,000.
c. Paid cash for factory payroll, $60,000. Of this total, $40,000 is for direct labor and $20,000 is for indirect labor.
d. Paid cash for other actual overhead costs, $7,625.
e. Applied overhead at the rate of 125% of direct labor cost.
f. Transferred cost of jobs completed to finished goods, $65,000.
g1. Jobs that had a cost of $65,000 were sold.
g2. Sold jobs on account for $92,800.

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Journal entry
No. Account Titles and Explanations Debit Credit
1 Raw Materials Inventory Dr $     90,000
      To Accounts payable $     90,000
2 Work in process Inventory Dr $     39,500
       To Raw Materials Inventory $     39,500
3 Manufacturing overhead Dr $     18,000
       To Raw Materials Inventory $     18,000
4 Factory payroll $     60,000
       To Cash $     60,000
5 Factory overhead $       7,625
       To Cash $       7,625
6 Work in process $     50,000
To Factory overhead $     50,000
7 Finished Goods inventory $     65,000
        To Finished Goods inventory $     65,000
8 Cost of goods sold $     65,000
To, Finished Goods inventory $     65,000
9 Accounts receivable $     92,800
      To Sales $     92,800
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