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PB13.

LO 4.7The following events occurred during March for Ajax Company. Prepare a journal entry for each transaction.

Materials were purchased on account for $5,429.
Materials were requisitioned to begin work on Job C15 in the amount of $2,500.
Direct labor expense for Job C15 was $4,250.
Actual overhead was incurred on account for $5,385.
Factory overhead was charged to Job C15 at the rate of 200% direct labor.
Job C15 was transferred to finished goods at $15,250.
Job C15 was sold on account for $28,000.

User Cmii
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Answer:

Journal entry for each transaction is given below.

Materials were purchased on account for $5,429.

Debit Material Account $5,429

Credit Payable $5,429

Materials were requisitioned to begin work on Job C15 in the amount of $2,500.

Debit WIP JOB C15 Account $2,500

Credit Material Account $2,500

Direct labor expense for Job C15 was $4,250.

Debit WIP JOB C15 Account $4,250

Credit Payroll Account $4,250

Actual overhead was incurred on account for $5,385.

Debit Factory Overhead Control Account $5,385

Credit Expense payable/cash $5,385

Factory overhead was charged to Job C15 at the rate of 200% direct labor.

Debit WIP JOB C15 Account $8,500

Credit Applied Factory overhead Account $8,500

Job C15 was transferred to finished goods at $15,250.

Debit Finished Good Account $15,250

Credit WIP JOB C15 Account $15,250

Job C15 was sold on account for $28,000

(2 entries will be passed at this stage)

Debit Cost of Good Sold $15,250

Credit Finished Good Account $15,250

Debit Receivable/Cash Account $28,000

Credit Sales $28,000

User Chris Tavares
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