MANAGERIAL ACCOUNTING FUND. W/CONNECT
MANAGERIAL ACCOUNTING FUND. W/CONNECT
5th Edition
ISBN: 9781259688713
Author: Wild
Publisher: MCG
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Chapter 3, Problem 15E
To determine

Journal Entries:

It is a book of original entry. It records and summarizes financial transaction of an entity in chronological manner, generally according to dual aspect of accounting.

Accounting rules regarding journal entries:

  • Balance increase when: Assets, losses and expenses get debited and liabilities, gains, and revenue get credited.
  • Balance decrease when: Assets, losses and expenses get credited and liabilities, gains, and revenue get debited.

To prepare: Journal entry.

Expert Solution & Answer
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Explanation of Solution

Solution:

(a)

    Date Account Title and Explanation Post ref Debit ($) Credit ($)
    June 30 Raw Material Inventory 500,000
    Accounts Payable 500,000
    (Being raw material inventory is purchased on credit )

                                                      Table (1)

  • Raw material inventory is an asset. Since, raw material inventory is purchased, it increases asset. Hence debit raw material inventory account
  • Account payable is a liability. Since, asset is purchased but not paid yet it increases liability. Hence, credit accounts payable account.

(b)

    Date Account Title and Explanation Post ref Debit ($) Credit ($)
    June 30 Work in Process-Weaving 240,000
    Work in Process-Sewing 75,000
    Raw Material Inventory 315,000
    (Being raw material directly used in production)
    ]

                                                      Table (2)

  • Work in process-weaving is an asset. Since, material is used to manufacture good but not completed yet, it increases work in process-weaving. Hence, debit work in process-weaving account.
  • Work in process-sewing is an asset. Since, material is used to manufacture good but not completed yet, it increases work in process-sewing. Hence, debit work in process-sewing account.
  • Raw material inventory is an asset. Since, raw material is used, it decreases asset. Hence, credit raw material inventory account.

(c)

    Date Account Title and Explanation Post ref Debit ($) Credit ($)
    June 30 Factory Overhead 120,000
    Raw Material Inventory 120,000
    (Being raw material indirectly used in production))

                                                      Table (3)

  • Factory overhead is an expense. Since, raw material inventory is used, it increases expense. Hence, debit factory overhead.
  • Raw material inventory is an asset. Since, raw material is used, it decreases asset. Hence credit raw material inventory account.

(d)

    Date Account Title and Explanation Post ref Debit ($) Credit ($)
    June 30 Work in Process-Weaving 1,200,000
    Work in Process-Sewing 360,000
    Factory Wages Payable 1,560,000
    (Being direct labor expenses incurred during production )

                                                      Table (4)

  • Work in process-weaving is an asset. Since, labor is used to manufacture, it increases work in process-weaving. Hence, debit work in process-weaving account.
  • Work in process-sewing is an asset. Since, labor is used to manufacture, it increases work in process-sewing. Hence, debit work in process-sewing account.
  • Factory wages payable is a liability. Since, expense is incurred and expense reduces equity. Hence, credit factory wages payable account.

(e)

    Date Account Title and Explanation Post ref Debit ($) Credit ($)
    June 30 Factory Overhead 1,500,000
    Factory Wages Payable 1,500,000
    (Being indirect labor expenses incurred during production )

                                                      Table (5)

  • Factory overhead is an expense. Since, labor is used, it increases expense. Hence, debit factory overhead.
  • Factory wages payable is a liability. Since, expense is incurred and expense reduces equity. Hence, credit factory wages payable account.

(f)

    Date Account Title and Explanation Post ref Debit ($) Credit ($)
    June 30 Factory Overhead 156,000
    Other Accounts 156,000
    (Being other indirect expenses incurred )

                                                      Table (6)

  • Factory overhead is an expense. Since, other overhead cost are indirect, it increases expense. Hence, debit factory overhead.
  • Other accounts are expense to the company. Since, expense reduces equity, other accounts is credited.

(g)

    Date Account Title and Explanation Post ref Debit ($) Credit ($)
    June 30 Work in Process-Weaving 960,000
    Work in Process-Sewing 540,000
    Factory overhead 1,500,000
    (Being factory overhead cost applied )

                                                      Table (7)

  • Work in process-weaving is an asset. Since, indirect labor is used to manufacture, it increases work in process-weaving. Hence, debit work in process-weaving account.
  • Work in process-sewing is an asset. Since, indirect labor is used to manufacture, it increases work in process-sewing. Hence, debit work in process-sewing account.
  • Factory overhead is an expense. Since, factory overhead is transferred to work in process, it decreases factory overhead. Hence, credit factory overhead account.

(h)

    Date Account Title and Explanation Post ref Debit ($) Credit ($)
    June 30 Factory Wages Payable 3,060,000
    Cash 3,060,000
    (Being factory wages paid))

                                                      Table (8)

  • Factory wages payable is a liability. Since, liability is paid, it decreases liability. Hence, debit factory wages payable account.
  • Cash is an asset. Since, cash is used to pay liability, it decreases asset. Hence, credit cash account.

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Chapter 3 Solutions

MANAGERIAL ACCOUNTING FUND. W/CONNECT

Ch. 3 - Prob. 6DQCh. 3 - Prob. 7DQCh. 3 - Prob. 8DQCh. 3 - Prob. 9DQCh. 3 - Prob. 10DQCh. 3 - Prob. 11DQCh. 3 - Prob. 12DQCh. 3 - Prob. 13DQCh. 3 - 14. APPLE Companies such as Apple commonly...Ch. 3 - Prob. 15DQCh. 3 - Prob. 16DQCh. 3 - Process vs. job order operations C1 For each of...Ch. 3 - Prob. 2QSCh. 3 - Prob. 3QSCh. 3 - The following refers to units processed in...Ch. 3 - Prob. 5QSCh. 3 - Prob. 6QSCh. 3 - Prob. 7QSCh. 3 - Prob. 8QSCh. 3 - Prob. 9QSCh. 3 - Prob. 10QSCh. 3 - Prob. 11QSCh. 3 - Prob. 12QSCh. 3 - Prob. 13QSCh. 3 - Prob. 14QSCh. 3 - Prob. 15QSCh. 3 - Prob. 16QSCh. 3 - Prob. 17QSCh. 3 - Prob. 18QSCh. 3 - Prob. 19QSCh. 3 - Prob. 20QSCh. 3 - Prob. 21QSCh. 3 - Prob. 22QSCh. 3 - Prob. 23QSCh. 3 - Prob. 24QSCh. 3 - Prob. 25QSCh. 3 - Prob. 26QSCh. 3 - Prob. 27QSCh. 3 - For each of the following products and services,...Ch. 3 - Prob. 2ECh. 3 - Prob. 3ECh. 3 - Prob. 4ECh. 3 - Prob. 5ECh. 3 - Prob. 6ECh. 3 - Prob. 7ECh. 3 - During April, the production department of a...Ch. 3 - Prob. 9ECh. 3 - Prob. 10ECh. 3 - Prob. 11ECh. 3 - Prob. 12ECh. 3 - Exercise 16-13AFIFO: Completing a process cost...Ch. 3 - Prob. 14ECh. 3 - Prob. 15ECh. 3 - Prob. 16ECh. 3 - Prob. 17ECh. 3 - RSTN Co. produces its product through two...Ch. 3 - Prob. 19ECh. 3 - Prob. 20ECh. 3 - Prob. 21ECh. 3 - Prob. 22ECh. 3 - Prob. 23ECh. 3 - Prob. 24ECh. 3 - Prob. 25ECh. 3 - Prob. 26ECh. 3 - Prob. 27ECh. 3 - Prob. 1PSACh. 3 - Victory Company uses weighted-average process...Ch. 3 - Prob. 3PSACh. 3 - Prob. 4PSACh. 3 - Prob. 5PSACh. 3 - Prob. 6PSACh. 3 - Prob. 7PSACh. 3 - Prob. 1PSBCh. 3 - Prob. 2PSBCh. 3 - Braun Company produces its product through a...Ch. 3 - Problem 16-4B Weighted average: Process cost...Ch. 3 - Prob. 5PSBCh. 3 - Prob. 6PSBCh. 3 - Prob. 7PSBCh. 3 - (This serial problem began in Chapter 1 and...Ch. 3 - Prob. 3CPCh. 3 - Prob. 1GLPCh. 3 - Apple reports in notes to its financial statements...Ch. 3 - Prob. 2BTNCh. 3 - Prob. 3BTNCh. 3 - Prob. 4BTNCh. 3 - Prob. 5BTNCh. 3 - Prob. 6BTNCh. 3 - Prob. 7BTNCh. 3 - Prob. 8BTNCh. 3 - Prob. 9BTN
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