Question

On November 1, Arvelo Corporation had $39,500 of raw materials on hand. During the month, the company purchased an additional $70,500 of raw materials. During November, $80,000 of raw materials were requisitioned from the storeroom for use in production. These raw materials included both direct and indirect materials. The indirect materials totaled $4,500. Prepare journal entries to record these events. Use those journal entries to answer the following questions: The credits to the Raw Materials account for the month of November total:

Answer 1

Arvelo Corporation

a. Journal Entries

Debit Raw materials $70,500

Credit Cash $70,500

To record the purchase of raw materials for cash.

Debit Work in Process $75,500

Credit Raw materials $75,500

To record the requisitioning of raw materials for production.

Debit Manufacturing overhead $4,500

Credit Raw materials $4,500

To record the indirect materials used in production.

b) The credits to the Raw Materials account for the month of November total: $80,000.

Step-by-step explanation:

a) Data and Analysis:

Beginning balance of raw materials $39,500

Raw materials $70,500 Cash $70,500

Work in Process $75,500 Raw materials $75,500

Manufacturing overhead $4,500 Raw materials $4,500