Question

The following transactions occurred in during the month of January:

a) Purchased $10,000 of raw materials on account

b) Requisitioned $8,000 of materials for Jobs 101-105

c) Requisitioned $500 of materials for general factory use

d) Paid factory workers wages $7,500

e) Paid factory supervisor salary of $1,500

f) Paid factory rent and utilities of $4,000

g) Applied factory overhead: predetermined rate is $50 per direct labor hour. January

Direct Labor hours = 100

h) Completed jobs 101 and 102 – total product cost of $2,250

i) Sold job 101 which had product costs of $1,200 for $3,800.

Journalize under a Lean Accounting System- note not all transactions require a journal entry

Answer 1

Required journal entries are as follows:

a) Raw materials A/c Dr $10000

To Accounts payable a/c    $10000

d) Factory wages A/c Dr $7500

To Bank A/c $7500

e) Factory Superviser salary A/c Dr $ 1500

To Bank A/c $ 1500

f) Factory rent and utilities A/c Dr $ 4000

To Bank A/c $ 4000

g) Work in progress a/c Dr $5000

To Factory overheads a/c $5000

h) Finished goods A/c Dr $2,250

To Work in progress a/c $2,250

i) Cost of sales A/c Dr $1200

To Finished goods A/c $1200

Bank A/c Dr $3800

To Costing P&L A/c $3800

Note: Remaining transactions do not need any entry because they do not have any financial impact.