Finn Manufacturing Company uses a job order cost accounting system and keeps perpetual inventory records. June 1 Purchased raw materials for $20,000 on account. 8 Raw materials requisitioned by production: Direct materials $8,000 Indirect materials 1,000 15 Paid factory utilities, $2,100 and repairs for factory equipment, $8,000. 25 Incurred $108,000 of factory labor. 25 Time tickets indicated the following: Direct Labor (7,000 hrs × $12 per hr) = $84,000 Indirect Labor (3,000 hrs × $8 per hr) = 24,000 $108,000 25 Applied manufacturing overhead to production based on a predetermined overhead rate of $7 per direct labor hour worked. 28 Goods costing $18,000 were completed in the factory and were transferred to finished goods. 30 Goods costing $15,000 were sold for $20,000 on account. Prepare journal entries to record the above transactions during the month of June. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit June 1 (Purchase of raw materials on account) 8 (To assign materials to jobs and overhead) 15 (To record payment of factory utilities and repairs) 25 (To record factory labor costs) 25 (To assign factory labor to jobs and overhead) 25 (To apply overhead to jobs) 28 (To record completion of production) 30 (To record sales of finished goods and its cost

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Finn Manufacturing Company uses a job order cost accounting system and keeps perpetual inventory records.

June	1	Purchased raw materials for $20,000 on account.
	8	Raw materials requisitioned by production:
		Direct materials		$8,000
		Indirect materials		1,000
	15	Paid factory utilities, $2,100 and repairs for factory equipment, $8,000.
	25	Incurred $108,000 of factory labor.
	25	Time tickets indicated the following:
		Direct Labor	(7,000 hrs × $12 per hr)	=	$84,000
		Indirect Labor	(3,000 hrs × $8 per hr)	=	24,000
					$108,000
	25	Applied manufacturing overhead to production based on a predetermined overhead rate of $7 per direct labor hour worked.
	28	Goods costing $18,000 were completed in the factory and were transferred to finished goods.
	30	Goods costing $15,000 were sold for $20,000 on account.

Prepare journal entries to record the above transactions during the month of June. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

Date	Account Titles and Explanation	Debit	Credit
June 1

	(Purchase of raw materials on account)
8


	(To assign materials to jobs and overhead)
15

	(To record payment of factory utilities and repairs)
25

	(To record factory labor costs)
25


	(To assign factory labor to jobs and overhead)
25

	(To apply overhead to jobs)
28

	(To record completion of production)
30



	(To record sales of finished goods and its cost)

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