Question

Cavy Company accumulated 580 hours of direct labor on Job 345 and 850 hours on Job 777. The direct labor was incurred at a rate of $17 per direct labor hour for Job 345 and $22 per direct labor for Job 777.

Required:

Journalize the entry to record the flow of labor costs into production. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for spaces or journal explanations. Every line on a journal page is used for debit or credit entries. Do not add explanations or skip a line between journal entries. CNOW journals will automatically indent a credit entry when a credit amount is entered.

CHART OF ACCOUNTS
Cavy Company
General Ledger
ASSETS 110 Cash 121 Accounts Receivable 131 Materials 133 Work in Process 135 Factory Overhead 137 Finished Goods 141 Supplies 142 Prepaid Expenses 181 Land 190 Factory Equipment 191 Accumulated Depreciation LIABILITIES 210 Accounts Payable 221 Utilities Payable 251 Wages Payable EQUITY 311 Common Stock 340 Retained Earnings 351 Dividends 390 Income Summary	REVENUE 410 Sales 610 Interest Revenue EXPENSES 510 Cost of Goods Sold 520 Wages Expense 531 Insurance Expense 532 Utilities Expense 533 Office Supplies Expense 560 Depreciation Expense 590 Miscellaneous Expense 710 Interest Expense

Cavy Company accumulated 580 hours of direct labor on Job 345 and 850 hours on Job 777. The direct labor was incurred at a rate of $17 per direct labor hour for Job 345 and $22 per direct labor for Job 777.

Required:

Journalize the entry to record the flow of labor costs into production. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for spaces or journal explanations. Every line on a journal page is used for debit or credit entries. Do not add explanations or skip a line between journal entries. CNOW journals will automatically indent a credit entry when a credit amount is entered.

X

Chart of Accounts

CHART OF ACCOUNTS
Cavy Company
General Ledger
ASSETS 110 Cash 121 Accounts Receivable 131 Materials 133 Work in Process 135 Factory Overhead 137 Finished Goods 141 Supplies 142 Prepaid Expenses 181 Land 190 Factory Equipment 191 Accumulated Depreciation LIABILITIES 210 Accounts Payable 221 Utilities Payable 251 Wages Payable EQUITY 311 Common Stock 340 Retained Earnings 351 Dividends 390 Income Summary	REVENUE 410 Sales 610 Interest Revenue EXPENSES 510 Cost of Goods Sold 520 Wages Expense 531 Insurance Expense 532 Utilities Expense 533 Office Supplies Expense 560 Depreciation Expense 590 Miscellaneous Expense 710 Interest Expense

X

General Journal

Journalize the entry to record the flow of labor costs into production on December 31. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for spaces or journal explanations. Every line on a journal page is used for debit or credit entries. Do not add explanations or skip a line between journal entries. CNOW journals will automatically indent a credit entry when a credit amount is entered.

PAGE 1

JOURNAL

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT
1
2

Answer 1

Journal Entry
Particulars			Debit	Credit
Work in Process			$ 28,560.00
To Wages Payable				$ 28,560.00

Workings:

Particulars			Job 345	Job 777	Total
Direct Labor hours accumulated			580	850
Direct Labor rate per hour			$      17.00	$        22.00
Total Direct Labor cost			$ 9,860.00	$ 18,700.00	$ 28,560.00