Question

Question 2 (30 points, 5 points each) Show the debits and credits for the transactions listed below. The accounts to use to fill in the table are as follows: cash, accounts payable, raw materials inventory, work in progress, finished goods inventory, cost of goods sold, sales revenue, and accounts receivable. Indicate whether the accounts go up or down and how much do they change by following the example given below Example: Order and receive $2,000 of steel from a supplier (don't pay them yet/will pay them after a month) Debit Credit Account payable goes up by $2,000 Raw material inventory goes up by $2,000 (a) Pay the supplier now Credit Debit (b) Move the steel ($2,000) onto the shop floor and start fabrication Debit Credit (c) Incur shop labour costs of $1,000 in making the product and people cash half of their payroll right away Debit Credit (d) Finish fabrication of an item with a cost of $3,000, of which steel cost is $2,000 and shop floor labour is $1,000, and move it to finished product inventory Credit Debit (e) Sell the material to a customer for $4,000 (Note: $1,000 difference between sales revenue and cost of goods sold) Debit Credit (f) The customer pays (30 days later) Credit Debit

PLEASE ANSWER EVERY PART OF THE QUESTION WITH DETAILED EXPLANATION SO I CAN UNDERSTAND

Answer 1

a	Pay the supplier
	Debit	Credit
	Accounts payable reduced by $2000	Cash is paid so reduced by $2000
b	Move the steel ($2000) onto shop floor and start fabrication
	Debit	Credit
	W.I.P goes up by $2000	Raw Material inventory reduced by $2000
c	Incur shop labor cost of $1000 in making the product and people cash half of the payroll right away.
	Debit	Credit
	W.I.P inventory goes up by $1000	Cash is reduced by $500
		Salary Payable should increase by $500
d	Finish fabrication of an item with a cost of $3000 of which steel cost is $2000 and shop floor labor is $1000
	Debit	Credit
	F.G inventory is increased by $3000	W.I.P inventory is reduced by $3000
e	Sell the material to customer for $4000
	Debit	Credit
	Accounts Receivables is increased by $4000	Sales Revenue is increased by $4000
	Debit	Credit
	Cost of goods is increased by $3000	F.G inventory is reduced by $3000