Question

Part 1)

Prepare the required general journal entries to record the following transactions for the Bell Company.

a. Purchased $40,000 of raw materials on account.
b. Used $12,000 of direct materials in the production department.
c. Used $5,000 of indirect materials.

Part 2) Prepare the required general journal entry to record the following transactions for the Flaherty Company.

a. Incurred $95,000 of factory labor cost which is paid in cash.
b. Used $78,000 of direct labor in the production department.
c. Used $17,000 of indirect labor.

Answer 1

Part1 :

a. Raw materials inventory A/c. Dr. 40000$

To Accounts payable A/c. 40000$

(Being rawmaterial purchased on account)

b. Work in process inventory A/c. Dr. 12000$

To Raw materials inventory A/c. 12000$

(Being direct material used in production department)

c. Manufacturing overhead A/c. Dr. 5000$

To Raw materials inventory A/c. 5000$

(Being indirect material used)

Part2 :

a. Factory payroll A/c. Dr. 95000$

To cash A/c. 95000$

(Being labour cost paid in cash )

b.work in process inventory A/c Dr. 78000$

To factory payroll A/c. 78000$

(Being direct labour expense recorded)

c. Manufacturing overhead A/c. Dr. 17000$

To factory payroll A/c. 17000$

(Being indirect labour expense recorded)