Journal Entries for the Cost Accounting Cycle.

On October 1, the trial balance of the Durable Company showed

Accounts Dr. Cr.
Cash on H $ 25,800
Accounts 47,740
Materials 44,880
Work in P 85,400
Finished 78,700
Plant and 237,240
Accounts Payable $ 54,270
Accrued Payroll 6,600

Accumulated Depreciation — Plant & Machinery 11 5,210

Allowance for Doubtful Accounts 2,825

Capital Stock 80,000

Retained Earnings 260,855
$ 519,760 $ 519,760
During October these transactions took place
(a) Materi $ 40,000
(b) Materi 65,000
“ " (indire 3,500
(c) Materi 900
(d) Total 80,000
“ “ “ (indir 9,500

(Assume there are no payroll deductions.)

(e) Wages 75,000

(f) Sundr 12,000

(g) Marketing and administrative expenses incurred during

October 8,500
(h) Accoun 300,000
(i) Accoun 135,000

(j) Depreciation to be provided for October on plant and machine

at the ra ?
(k) Factor 14,200
(1) Work i 75,000
(m) Cost o 205,000
(n) Sales 285,000
Required: Journal entries for the above transactions.

Account Title & explanation Debit Credit

a) Raw Material inventory 40,000
Accounts Payable 40,000
( purchased raw material)

b) Work in process Inventory 65,000

Factory Overhead 3,500
Raw Material inventory 68,500
( Used direct material and Indirect material to jobs)

c) Accounts Payable 900

Raw Material inventory 900
(To record return of material)

d) Work in process Inventory 80,000

Factory Overhead 9,500
Accrued Payroll 89,500
(Applied payroll to indirect labor and direct labor)

e) Accrued Payroll 75,000

Cash 75,000
(To record wages paid)

f) Factory Overhead 12000

Cash 12000
(To record factory sundry expenses)

g) Marketing and Adminstrative Expenses 8,500

Cash 8,500
(To record Marketing and Adminstrative Expenses)

h) Cash 300,000
Accounts Receivable 300,000
(To record collectionof Accounts Reeivable)

i) Accounts Payable 135,000

Cash 135,000
(To record accounts payable paid)

j) Factory Overhead (237240*10%*1/12) 1,977

Accumulated Depreciation 1,977
(To record depreciation)
k) Work in Process Inventory 14200
Factory Overhead 14200
(To record factory overhead applied)

l) Finished Goods Inventory 169,600 (85400+65000+80000+1420

Work in process Inventory 169600
( transfered work in process inventory to Finished goods Inventory)

m) Cost of Goods Sold 205,000

Finished Goods Inventory 205,000
( to record cost of Jobs sold)

n) Accounts receivable 285,000

Sales 285,000
( sold Jobs on account)
urable Company showed
(85400+65000+80000+14200-75000)