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Concept explainers
1.
Journalize the given material transactions.
1.
![Check Mark](/static/check-mark.png)
Explanation of Solution
T-account: The condensed form of a ledger is referred to as T-account. The left-hand side of this account is known as debit, and the right hand side is known as credit.
Journalize the given material transactions.
S.no | Description | Post Ref | Debit ($) | Credit($) |
a. | Materials | 58,000 | ||
Accounts payable | 58,000 | |||
(To record material purchase) | ||||
b. | Work-in-process | 45,000 | ||
Factory overhead | 8,000 | |||
Materials | 53,000 | |||
(To record direct material requisitioned to production) | ||||
c. | Materials | 900 | ||
Work-in process | 900 | |||
(To record direct materials returned to storeroom) | ||||
d. | Accounts payable | 1,500 | ||
Materials | 1,500 | |||
(To record materials returned to vendor) | ||||
e | Accounts payable | 51,500 | ||
Cash | 51,500 | |||
(To record payment made to vendor) |
Table (1)
Description:
a.
- Material is an asset account and it is increased. Therefore, debit the materials account.
- Accounts payable is a liability account and it is increased. Therefore, credit the accounts payable account.
b.
- Work-in-process is an asset account and it is increased. Therefore, debit the work-in-process account.
- Factory overhead is an expense account and it is increased. Therefore, debit the factory overhead account.
- Material is an asset account and it is decreased. Therefore, credit the materials account.
c.
- Material is an asset account and it is increased. Therefore, debit the materials account.
- Work-in-process is an asset account and it is decreased. Therefore, credit the work-in-process account.
d.
- Accounts payable is a liability account and it is decreased. Therefore, debit the accounts payable account.
- Material is an asset account and it is decreased. Therefore, credit the material account
e.
- Accounts payable is a liability account and it is decreased. Therefore, debit the accounts payable account.
- Cash is an asset account and it is decreased. Therefore, credit the material account
2.
2.
![Check Mark](/static/check-mark.png)
Explanation of Solution
Prepare T-account for Cash.
Cash | |||||||
Date | Particulars | Post Ref. | Debit ($) | Date | Particulars | Post Ref. | Credit($) |
Balance | 64,250 | (e) | 51,500 | ||||
Balance c/d | 12,750 | ||||||
64,250 | 64,250 |
Table (2)
Prepare T-account for materials.
Materials | |||||||
Date | Particulars | Post Ref. | Debit ($) | Date | Particulars | Post Ref. | Credit($) |
Balance | 23,500 | (b) | 53,000 | ||||
(a) | 58,000 | (d) | 1,500 | ||||
(c) | 900 | Balance c/d | 27,900 | ||||
82,400 | 82,400 |
Table (3)
Prepare T-account for accounts payable.
Accounts payable | |||||||
Date | Particulars | Post Ref. | Debit ($) | Date | Particulars | Post Ref. | Credit($) |
(d) | 1,500 | Balance | 29,000 | ||||
(e) | 51,500 | (a) | 58,000 | ||||
Balance c/d | 34,000 | ||||||
87,000 | 87,000 |
Table (4)
Prepare T-account for Factory overhead.
Factory overhead | |||||||
Date | Particulars | Post Ref. | Debit ($) | Date | Particulars | Post Ref. | Credit($) |
(b) | 8,000 |
Table (5)
Prepare T-account for work in process.
Work in process | |||||||
Date | Particulars | Post Ref. | Debit ($) | Date | Particulars | Post Ref. | Credit($) |
Balance | 31,000 | (c) | 900 | ||||
(b) | 45,000 | Balance c/d | 75,100 | ||||
76,000 | 76,000 |
Table (6)
3a.
Report the cash balance as on September 30.
3a.
![Check Mark](/static/check-mark.png)
Explanation of Solution
Cash balance during September 30 is $12,750.
3b.
Report the material balance as on September 30.
3b.
![Check Mark](/static/check-mark.png)
Explanation of Solution
Material balance during September 30 is $27,900.
3c.
Report the accounts payable balance as on September 30.
3c.
![Check Mark](/static/check-mark.png)
Explanation of Solution
Accounts payable balance during September 30 is $34,000.
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Chapter 2 Solutions
Principles of Cost Accounting
- Principles of Cost AccountingAccountingISBN:9781305087408Author:Edward J. Vanderbeck, Maria R. MitchellPublisher:Cengage LearningManagerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College PubCornerstones of Cost Management (Cornerstones Ser...AccountingISBN:9781305970663Author:Don R. Hansen, Maryanne M. MowenPublisher:Cengage Learning
- College Accounting, Chapters 1-27AccountingISBN:9781337794756Author:HEINTZ, James A.Publisher:Cengage Learning,Principles of Accounting Volume 2AccountingISBN:9781947172609Author:OpenStaxPublisher:OpenStax CollegeExcel Applications for Accounting PrinciplesAccountingISBN:9781111581565Author:Gaylord N. SmithPublisher:Cengage Learning
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