Question

Schrager Company has two production departments: Cutting and Assembly. July 1 inventories are Raw Materials $5,000, Work in Process—Cutting $3,700, Work in Process—Assembly $11,000, and Finished Goods $32,100. During July, the following transactions occurred.

1.		Purchased $63,000 of raw materials on account.
2.		Incurred $60,600 of factory labor. (Credit Wages Payable.)
3.		Incurred $71,700 of manufacturing overhead; $42,600 was paid and the remainder is unpaid.
4.		Requisitioned materials for Cutting $16,400 and Assembly $9,600.
5.		Used factory labor for Cutting $33,200 and Assembly $27,400.
6.		Applied overhead at the rate of $20 per machine hour. Machine hours were Cutting 1,720 and Assembly 1,770.
7.		Transferred goods costing $69,250 from the Cutting Department to the Assembly Department.
8.		Transferred goods costing $135,200 from Assembly to Finished Goods.
9.		Sold goods costing $152,400 for $203,000 on account.

Journalize the transactions.

Answer 1

Journal entries in the books of Schrager Company for the month of July

  

Date /Transaction No.	Account Title and explanation	Debit	Credit
1	Raw Material Inventory	63,000
	To Accounts Payable		63,000
	( Being raw material purchased)
2	Factory Labor	60,600
	To Wages Payable		60,600
	(Being expense on wages recorded)
3	Manufacturing Overhead	71,700
	To Cash		42,600
	To Accounts Payable		29,100
	(Being expenses on manufacturing overhead recorded)
4	Work in process - Cutting	16,400
	Work in process - Assembly	9,600
	To Raw Material Inventory		26,000
	(Being transfer of raw material to processes recorded)
5	Work in process - Cutting	33,200
	Work in process - Assembly	27,400
	To Factory Labor		60,600
	(Being labor cost against processes recorded)
6	Work in process - Cutting (1720 X 20)	34,400
	Work in process - Assembly (1770 X 20)	35,400
	To Manufacturing Overhead		69,800
	(Being manufacturing overhead applied recorded)
7	Work in process - Assembly	69,250
	To work in process - Cutting		69,250
	(Being transfer of goods to assembly department recorded)
8	Finished Goods Inventory	135,200
	To Work in process - assembly		135,200
	(Being transfer of goods to finished goods recorded)
9	Cost of goods sold	152,400
	To finished goods inventory		152,400
	(Being cost of goods sold recorded)
9	Accounts receivable	203,000
	To Sales		203,000
	(Being Sales recorded)