Question

On November 1, Arvelo Corporation had $32,000 of raw materials on hand. During the month, the company purchased an additional $78,000 of raw materials. During November, $95,000 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 $3,000.

Prepare journal entries to record these events.

Answer 1

Answer and Explanation:

Data provided

Raw Material = $95,000

Indirect material = $3,000

The Journal entry is show below:-

Work in progress inventory Dr, $92,000

($95,000 - $3,000)

Manufacturing overhead Dr, $3,000

To Raw Material $95,000

(Being raw material is recorded)

Therefore for recording the raw material we simply debited the work in progress inventory and credited the raw material