Question

Prepare journal entries to record the following production activities for Hotwax. 1. Incurred direct labor of $200,000 (credit Factory Payroll Payable). 2. Incurred indirect labor of $11,500 (credit Factory Payroll Payable). 3. Total factory payroll of $211,500 was paid in cash.

Answer 1

a. Debit Work-in- Progress with $200,000, and credit factory payroll payable with $200,000.

b. Debit factory overhead with $11,500, and credit factory payroll payable with $11,500.

c. Debit factory payroll payable with $211,500, and credit Cash with $211,500.

Step-by-step explanation:

This will appear as follows in the account:

Hotwax's Journal Entries

Details Dr ($) Cr ($)

Work-in- Progress 200,000

Factory payroll payable 200,000

Being direct labor cost incurred

Factory overhead 11,500

Factory payroll payable 11,500

Being the indirect labor cost incurred

Factory payroll payable 211,500

Cash 211,500

Being total factory payroll or labor cost paid in cash