Question

Sunset Products manufactures skateboards. The following transactions occurred in March.

1. Purchased $24,000 of materials on account.

2. Issued $1,400 of supplies from the materials inventory.

3. Purchased $25,800 of materials on account.

4. Paid for the materials purchased in transaction (1) using cash.

5. Issued $30,800 in direct materials to the production department.

6. Incurred direct labor costs of $29,000, which were credited to Wages Payable.

7. Paid $22,300 cash for utilities, power, equipment maintenance, and other miscellaneous items for the manufacturing shop.

8. Applied overhead on the basis of 125 percent of direct labor costs.

9. Recognized depreciation on manufacturing property, plant, and equipment of $5,800.

The following balances appeared in the accounts of Sunset Products for March.

	Beginning			Ending
Materials Inventory	$	10,200			?
Work-in-Process Inventory		17,300			?
Finished Goods Inventory		65,800		$	37,300
Cost of Goods Sold					73,800

Required:

a. Prepare journal entries to record the transactions.

Answer 1

Events	Particulars			Debit	Credit
1)	Materials Inventory			$ 24,000.00
	To Accounts Payable				$ 24,000.00
2)	Manufacturing Overhead Control			$   1,400.00
	To Materials Inventory				$   1,400.00
3)	Materials Inventory			$ 25,800.00
	To Accounts Payable				$ 25,800.00
4)	Accounts Payable			$ 24,000.00
	To Cash				$ 24,000.00
5)	Work in Process			$ 30,800.00
	To Materials Inventory				$ 30,800.00
6)	Work in Process			$ 29,000.00
	To Wages Payable				$ 29,000.00
7)	Manufacturing Overhead Control			$ 22,300.00
	To Cash				$ 22,300.00
8)	Work in Process			$ 36,250.00
	To Manufacturing Overhead Control				$ 36,250.00
	($ 29000 x 125%)
9)	Manufacturing Overhead Control			$   5,800.00
	To Accumulated Depreciation				$   5,800.00