Question

[The following information applies to the questions displayed below.] The following information is available for Lock-Tite Company, which produces special-order security products and uses a job order costing system. April 30 May 31 Inventories Raw materials $ 50,000 $ 38,000 Work in process 9,200 18,500 Finished goods 59,000 34,300 Activities and information for May Raw materials purchases (paid with cash) 171,000 Factory payroll (paid with cash) 100,000 Factory overhead Indirect materials 17,000 Indirect labor 23,000 Other overhead costs 106,000 Sales (received in cash) 1,800,000 Predetermined overhead rate based on direct labor cost 55 % Raw materials purchases for cash. Direct materials usage. Indirect materials usage. Prepare journal entries for the above transactions for the month of May.

Answer 1

	Account titles & explanations					Debit	Ccredit
a.	Raw materials inventory					171,000
	Cash						171,000
b.	Work in process inventory					166,000
	Raw materials inventory						166,000
c.	Factory overhead					17,000
	Raw materials inventory						17,000
	Raw materials
	opening	50,000	wIP	166,000
	purchases	171,000	FOH	17,000
	end bal	38,000