Question

Prepare journal entries of the following cases.

a. Purchased raw material of $52000 amount on account.
b. Among $52000 raw material, $15000 amount is used as indirect material and $37000 used direct material.
c. Wage of $35000(wages payable) is expensed.
d. Among the wage expensed, $30000 is for direct labor, and $5000 is for indirect labor.
e. Overhead incurred is as follows: Utilities $4800. Prepaid insurance(for factory)$2000. Accounts payable(for repairs)$2600.

Answer 1

To prepare the journal entries, you need to understand the concept of raw materials, wages, and overheads. The journal entries for each case are as follows: a. Purchased raw material on account, b. Allocation of raw materials, c. Wage expense, d. Allocation of wage expense, e. Overhead incurred.

Step-by-step explanation:

To prepare the journal entries for the given cases, we need to understand the concept of raw materials, wages, and overheads in accounting. Here are the journal entries for each case:

a. Purchased raw material on account:

Raw Material Inventory (debit) $52,000

Accounts Payable (credit) $52,000

b. Allocation of raw materials:

Indirect Material (debit) $15,000

Direct Material (debit) $37,000

Raw Material Inventory (credit) $52,000

c. Wage expense:

Wage Expense (debit) $35,000

Wages Payable (credit) $35,000

d. Allocation of wage expense:

Direct Labor (debit) $30,000

Indirect Labor (debit) $5,000

Wage Expense (credit) $35,000

e. Overhead incurred:

Utilities Expense (debit) $4,800

Prepaid Insurance (debit) $2,000

Repairs Expense (debit) $2,600

Accounts Payable (credit) $9,400