Question

During the current month, Tomlin Company incurs the following manufacturing costs.(a) Purchased raw materials of $16,940 on account.(b) Incurred factory labor of $38,528. Of that amount, $32,281 relates to wages payable and $6,247 relates to payroll taxes payable.(c) Factory utilities of $3,108 are payable, prepaid factory property taxes of $2,008 have expired, and depreciation on the factory building is $8,322.Prepare journal entries for each type of manufacturing cost.

Answer 1

raw materials 16,940 debit

account payable 16,940 credit

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WIP 38,528 debit

wages payable 32,281 credit

payroll taxes payable 6,247 credit

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Factory Overhead 13,438 debit

utilities payable 3,108 credit

prepaid property taxes 2,008 credit

accumulated dep-building 8,322 credit

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Step-by-step explanation:

(A) as the purchase is on account we use account payable

(B) we declare each payable amount and capitalized through work in process account

(C)this are actual overhead cost so we debit overhead to later compare with the applied overhead (credit) and solve for applied or underapplied overhead.

Also, we credit the payable utilities, decrease the prepaid for the expired amount and increase the accumulated depreciaiton in the facotry building.