Question

Larned Corporation recorded the following transactions for the just completed month. $78,000 in raw materials were purchased on account. $76,000 in raw materials were used in production. Of this amount, $64,000 was for direct materials and the remainder was for indirect materials. Total labor wages of $121,000 were paid in cash. Of this amount, $103,400 was for direct labor and the remainder was for indirect labor. Depreciation of $197,000 was incurred on factory equipment.

Required:
Record the above transactions in journal entries.

Answer 1

Answer and Explanation:

The journal entries are shown below:

1. Raw material inventory A/c Dr.$78,000

To accounts payable $78,000

(To record raw material purchased)

2. Work in process inventory A/c Dr. $64,000

Manufacturing overhead A/c Dr. $12,000

To Raw material inventory Cr. $76,000

(To record the raw material requisitioned is recorded)

3. Work in Process $103,400

Manufacturing overhead $17,600

To Cash $121,000)

(Being the cash paid is recorded)

4. Manufacturing overhead $197,000

To Accumulated Depreciation - equipment $197,000

(Being the depreciation incurred on factory equipment is recorded)