Question

During the current month, a company that uses job order costing purchases $96,000 in raw materials for cash. It then uses $24,000 of raw materials indirectly as factory supplies and uses $63,300 of raw materials as direct materials. Prepare journal entries to record these three transactions

Answer 1

Company A

Journal Entries:

Debit Raw materials inventory $96,000

Credit Cash Account $96,000

To record the purchase of raw materials for cash.

Debit Manufacturing Overhead $24,000

Credit Raw materials inventory $24,000

To record the issue of raw materials as factory supplies.

Debit Work in Process $63,300

Credit Raw materials inventory $63,300

To record the issue of raw materials to production.

Step-by-step explanation:

The journal entries above record the transactions regarding the purchase of raw materials and the uses of the raw materials in production. The entries identify the accounts involved for each transaction and which accounts would be debited or credited.