Question

Homework,...Prepare journal entries for the following Ø Purchased $320,000 of materials. o Used $275,000 of direct materials in production. o Incurred $236,250 of direct labor wages. O Applied factory overhead at a rate of 80% of direct labor cost. ($236,250 X .80) = $189,000 o Transferred $670,000 of work in process to finished goods. O Sold goods with a cost of $635,000. o Sold goods for $1,125,000. o Incurred $275,000 of selling expenses. O Incurred $100,000 of administrative expenses.

Answer 1

Solution:
1	Journal Entries :
				$
S.No.	Particulars	Particulars	Debit	Credit
1	Purchase Raw materials A/c Dr.		$             320,000
		To Cash A/c		$         320,000
2	Work in progress Inventory A/c Dr.		$             275,000
		To Raw Materials A/c		$         275,000
3	Direct Labour Wages Expense A/c Dr.		$             236,250
		To Cash A/c		$         236,250
4	Work in progress Inventory A/c Dr.		$             189,000
		To Factory Overheads A/c		$         189,000
5	Finished Good Inventory A/c Dr.		$             670,000
		To Work in progress Inventory A/c		$         670,000
6	Cost of Goods Sold A/c Dr.		$             635,000
		To Finished Good Inventory A/c		$         635,000
7	Cash A/c Dr.		$          1,125,000
		To Sales		$      1,125,000
8	Selling Expense A/c Dr.		$             275,000
		To Cash A/c		$         275,000
9	Administrative Expense A/c Dr.		$             100,000
		To Cash A/c		$         100,000