Question

During the current month, Ringling Company incurs the following manufacturing costs:

(a) Raw material purchases of $4,200 on account.
(b) Incurs factory labor of $18,000. Of that amount, $15,000 relates to wages payable and $3,000 relates to payroll taxes payable.
(c) Factory utilities of $2,200 are payable, prepaid factory insurance of $1,800 has expired, and depreciation on the factory building is $3,500.
Prepare journal entries for each type of manufacturing cost.

Answer 1

Part a

Debit : Raw material $4,200

Credit : Accounts Payable $4,200

Part b

Debit : Salaries $18,000

Credit : Salaries Payable $18,000

Part c

Debit : Factory utilities $2,200

Debit : Factory Insurance $1,800

Debit : Depreciation $3,500

Credit : Overheads $7,500

Step-by-step explanation:

The journal entries for each type of manufacturing cost have been prepared above.