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3) A Company has two production departments: Fabricating and Finishing. Beginning inventories are: Work in Process—Fabricating,...

3) A Company has two production departments: Fabricating and Finishing. Beginning inventories are: Work in Process—Fabricating, $6,030; Work in Process—Finishing, $4,100; and Finished Goods, $5,600. During the month the following transactions occurred:

  1.     Purchased $45,000 of raw materials on account.
  2.     Incurred $65,000 of factory labor. Wages are unpaid.
  3.     Incurred $50,000 of manufacturing overhead; $44,000 was paid and the remainder is unpaid.
  4.     Requisitioned materials for Fabricating, $10,000 and Finishing, $8,000.
  5.     Used factory labor for Finishing, $52,000 and Fabricating, $13,000.
  6.     Applied $45,000 of overhead based on machine hours used in each department. The Finishing Department used twice as many machine hours as did Fabricating.

Required: Journalize the transactions for the month.

Business   Accounting   
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Answer #1
Dr Cr
Raw Materials Inventory 45000
Accounts Payable 45000
(to record purchase of Raw Material)
Factory Labor 65000
Wages Payable 65000
(to record wages payable)
Manufacturing Overhead 50000
Accounts Payable 6000
Cash 44000
(to record MOH incured)
Work in Process—Fabricating 10000
Work in Process—Finishing 8000
Raw Materials Inventory 18000
(to record issue of Material to WIP)
Work in Process—Fabricating 13000
Work in Process—Finishing 52000
Factory Labor 65000
(to record wages charged to WIP/)
Work in Process—Fabricating 15000
Work in Process—Finishing 30000
Manufacturing Overhead 45000
(to record overhead harged to WIP/)
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