Question

Larned Corporation recorded the following transactions for the just completed month.

1. $76,000 in raw materials were purchased on account.
2. $74,000 in raw materials were used in production. Of this amount, $66,000 was for direct materials and the remainder was for indirect materials.
3. Total labor wages of $124,500 were paid in cash. Of this amount, $100,200 was for direct labor and the remainder was for indirect labor.
4. Depreciation of $197,000 was incurred on factory equipment.
   1. Record the above transactions in journal entries. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
      1. $76,000 in raw materials were purchased on account.
      2. $74,000 in raw materials were used in production. Of this amount, $66,000 was for direct materials and the remainder was for indirect materials.
      3. Total labor wages of $124,500 were paid in cash. Of this amount, $100,200 was for direct labor and the remainder was for indirect labor.
      4. Depreciation of $197,000 was incurred on factory equipment.

Answer 1

Answer :-

Journal entries to record the transaction are as follows :-

No.	account and explanation	Debit	Credit
1	Raw material	$76,000
	To Account payable		$76,000
	(To record purchase of raw materials on account)
2	Work in process	$66,000
	Manufacturing overhead (Indirect material = $74,000 - $66,000)	$8,000
	To Raw material		$74,000
	(To record raw material used in Production)
3	Work in process	$100,200
	Manufacturing overhead ( Indirect labor cost = $124,500 - $100,200)	$24,300
	To Cash		$124,500
	(To record labor wages were paid in cash)
4	Manufacturing overhead	$197,000
	To Accumulated depreciation		$197,000
	(To record Depreciation Expense was incurred on Factory equipment)

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