Question

Fort Corporation had the following transactions during its first month of operations

1. Purchased raw materials on account, $85,000. 2. Raw Materials of $30,000 were requisitioned to the factory. An analysis of the materials requisition slips indicated that $6,000 was classified as indirect materials. 3. Factory labor costs incurred were $175,000 of which $145,000 pertained to factory wages payable and $30,000 pertained to employer payroll taxes payable. 4. Time tickets indicated that $145,000 was direct labor and $30,000 was indirect labor. 5. Overhead costs incurred on account were $198,000. 6. Manufacturing overhead was applied at the rate of 150% of direct labor cost. 7. Goods costing $115,000 are still incomplete at the end of the month; the other goods were completed and transferred to finished goods. 8. Finished goods costing $100,000 to manufacture were sold on account for $130,000.
Journalize the above transactions for Fort Corporation. (Record journal entries in the order presented in the problem. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Debit Credit No. Account Titles and Explanation
1.
2.
3.
4.
5.
6.
7.
8.

Answer 1

Account title and description Debit Credit

Raw materials inventory $85,000

Accounts Payable $85,000

Account title and description Debit Credit

Work in Process $24,000

Manufacturing overhead $6,000

Raw materials inventory $30,000

Account title and description Debit Credit

Factory Labor $175,000

Factory wages payable $145,000

Payroll taxes payable $30,000

Account title and description Debit Credit

Work in process Inventory $145,000

Manufacturing overhead $30,000

Factory Labor $175,000

Account title and description Debit Credit

Manufacturing overhead $198,000

Accounts payable $198,000

Account title and description Debit Credit

Work in process Inventory $217,500

Manufacturing overhead $217,500

Working

= 145,000 * 150% = $217,500

Account title and description Debit Credit

Finished goods Inventory $271,500

Work in process Inventory $271,500

Working

= 24,000 + 145,000 + 217,500 - 115,000 = $271,500

Account title and description Debit Credit

Account receivables $130,000

Sales $130,000

Cost of goods sold $100,000

Finished goods Inventory $100,000