Question

PA14.

LO 4.8A movie production studio incurred the following costs related to its current movie:

Purchased office supplies on account: $33,000
Issued direct supplies: $22,512
Issued indirect supplies: $7,535
Time tickets showing direct labor: $32,503,230
Time tickets showing indirect labor: $574,326
Utilities expense on account: $957,323
Overhead applied: 10% of direct labor cost

Create journal entries for the listed transactions.

Answer 1

Journal entries for each listed transaction is given below.

Purchased office supplies on account: $33,000

Debit Supplies Account $33,000

Credit Payable/Cash $33,000

Issued direct supplies: $22,512

Debit WIP Studio $22,512

Credit Supplies Account $22,512

Issued indirect supplies: $7,535

Debit WIP Studio $7,535

Credit Supplies Account $7,535

Time tickets showing direct labor: $32,503,230

Debit WIP Studio $32,503,230

Credit Payroll Account $32,503,230

Time tickets showing indirect labor: $574,326

Debit Factory overhead control Account $574,326

Credit Payroll Account $574,326

Utilities expense on account: $957,323

Debit Factory overhead control Account $957,323

Credit Utilities expense $957,323

Overhead applied: 10% of direct labor cost

Debit WIP Studio $3,250,323

Credit Applied factory overhead Account $3,250,323

(10% of 32,503,230)