Question

g During the current month, Wacholz Company incurs the following manufacturing costs. (a) Purchased raw materials of $17,500 on account. (b) Incurred factory labor of $39,900. Of that amount, $30,800 relates to wages payable and $9,100 relates to payroll taxes payable. (c) Factory utilities of $3,500 are payable, prepaid factory property taxes of $2,770 have expired, and depreciation on the factory building is $9,900.

Answer 1

(a) Dr Raw Materials Inventory $17,500

Cr Accounts Payable $17,500

(b) Dr Factory Labor $39,900

Cr Employer Payroll Taxes $9,100

Cr Factory Wages Payable $30,800

(c) Dr Manufacturing Overhead $16,170

Cr Prepaid Property Taxes $2,770

Cr Utilities Payable $3,500

Cr Accumulated Depreciation $9,900

Step-by-step explanation:

Preparation of the journal entries for each type of manufacturing cost.

(a) Dr Raw Materials Inventory $17,500

Cr Accounts Payable $17,500

(To record Purchases of raw materials on account)

(b) Dr Factory Labor $39,900

Cr Employer Payroll Taxes $9,100

Cr Factory Wages Payable $30,800

(To record factory labor costs)

(c) Dr Manufacturing Overhead $16,170

($2,770+$3,500+$9,900)

Cr Prepaid Property Taxes $2,770

Cr Utilities Payable $3,500

Cr Accumulated Depreciation $9,900

(To record overhead costs)