Question

1. A firm produces its products by a continuous process involving three production departments, 1 through 3. Prepare entries to record the following selected transactions related to production during August:

   a. Materials purchased on account, $120,000.

   	Materials
   	Accounts Payable

   b. Material requisitioned for use in Department 1, $125,700, of which $124,200 entered directly into the product. If an amount box does not require an entry, leave it blank.

   	Factory Overhead-Department 1
   	Work in Process-Department 1
   	Materials

   c. Labor cost incurred in Department 1, $195,400, of which $174,000 was used directly in the manufacture of the product. If an amount box does not require an entry, leave it blank.

   	Factory Overhead-Department 1
   	Work in Process-Department 1
   	Wages Payable

   d. Factory overhead costs for Department 1 incurred on account, $54,700.

   	Factory Overhead-Department 1
   	Accounts Payable

   e. Depreciation on machinery in Department 1, $29,200.

   	Factory Overhead-Department 1
   	Accumulated Depreciation-Machinery

   f. Expiration of prepaid insurance chargeable to Department 1, $7,000.

   	Factory Overhead-Department 1
   	Prepaid Insurance

   g. Factory overhead applied to production in Department 1, $106,300.

   	Work in Process-Department 1
   	Factory Overhead-Department 1

   h. Output of Department 1 transferred to Department 2, $362,700.

   	Work in Process-Department 2
   	Work in Process-Department 1

Check My Work1 more Check My Work uses remaining.

Answer 1

SOLUTION

S NO	General Journal	Debit	Credit
a	Materials	$120,000
	Accounts Payable		$120,000
b	Factory Overhead--Department 1	$1,500
	Work in Process--Department 1	$124,200
	Materials		$125,700
c	Factory Overhead--Department 1	$21,400
	Work in Process--Department 1	$174,000
	Wages Payable		$195,400
d	Factory Overhead--Department 1	$54,700
	Accounts Payable		$54,700
e	Factory Overhead--Department 1	$29,200
	Accumulated Depreciation--Machinery		$29,200
f	Factory Overhead--Department 1	$7,000
	Prepaid Insurance		$7,000
g	Work in Process--Department 1	$106,300
	Factory Overhead		$106,300
h	Work in Process--Department 2	$362,700
	Work in Process--Department 1		$362,700