Question

Larned Corporation recorded the following transactions for the just completed month.

$72,000 in raw materials were purchased on account. $70,000 in raw materials were used in production. Of this amount, $62,000 was for direct materials and the remainder was for indirect materials. Total labor wages of $106,000 were paid in cash. Of this amount, $102,200 was for direct labor and the remainder was for indirect labor. Depreciation of $193,000 was incurred on factory equipment.

Required:
Record the above transactions in journal entries.

Answer 1

Larned Corporation

Journal Entries

Sr. No Account Debit Credit

1 Materials $72,000

Accounts Payable $72,000

$72,000 in raw materials were purchased on account.

2 Work in Process $62,000

Materials Inventory $62,000

$70,000 in raw materials were used in production. Of this amount, $62,000 was for direct materials

3 Manufacturing Overheads $8000

Materials Inventory $ 8000

$70,000 in raw materials were used in production. Of this amount, $62,000 was for direct materials and the remainder was for indirect materials.

4 Work In Process $ 102,000

Payroll ( Direct Labor ) $102,000

$102,200 was for direct labor

5 Manufacturing Overheads $3800

Payroll (Indirect Labor) $3800

Total labor wages of $106,000 were paid in cash. Of this amount, $102,200 was for direct labor and the remainder was for indirect labor.

6 Depreciation $193,000

Factory Overhead Control Account $193,000

Depreciation of $193,000 was incurred on factory equipment.