Explanation Prepare two summary journal entries for the given listed accounts by illustrating a transaction that would cause the account to be debited in the first entry and by illustrating a transaction that would cause the account to be credited in the second entry. a. Materials Inventory: Date Accounts title and explanation Debit ($) Credit ($) Material inventory xxx Accounts payable xxx ( To record the purchase of direct materials on account.) (Table 1) Material inventory is an asset and there is an increase value of an asset. Hence, debit the materials inventory account. Accounts payable is a liability and there is an increase in the value of liability. Hence, credit the accounts payable account. Date Accounts title and explanation Debit ($) Credit ($) Work in process inventory xxx Material inventory xxx ( To record the cost of direct material s used) (Table 2) Work in process inventory is an asset and there is an increase in the value of an asset. Hence, debit the work in process inventory account. Material inventory is an asset and there is a decrease value of an asset. Hence, credit the materials inventory account. b. Direct labor: Date Accounts title and explanation Debit ($) Credit ($) Direct labor Cash ( To record factory payroll paid to direct workers) (Table 3) Direct labor is an asset and there is an increase in the value of an asset. Hence, debit the direct labor account. Cash is an asset and there is a decrease value of an asset. Hence, credit the cash account. Date Accounts title and explanation Debit ($) Credit ($) Work in process inventory xxx Direct labor xxx ( To record the cost of direct labor applied to production of the period) (Table 4) Work in process inventory is an asset and there is an increase in the value of an asset. Hence, debit the work in process inventory account. Direct labor is an asset and there is a decrease value of an asset. Hence, credit the direct labor account...

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18th Edition

ISBN: 9781260006476

Author: Jan Williams, Susan Haka, Mark S Bettner, Joseph V Carcello

Publisher: McGraw-Hill Education

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Chapter 17, Problem 8BE

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Prepare two summary journal entries for the listed accounts.

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