Question

Crawford Corporation incurred the following transactions.

1. Purchased raw materials on account $46,300.
2. Raw materials of $36,000 were requisitioned to the factory. An analysis of the materials requisition slips indicated that $6,800 was classified as indirect materials.
3. Factory labor costs incurred were $59,900, of which $51,000 pertained to factory wages payable and $8,900 pertained to employer payroll taxes payable.
4. Time tickets indicated that $54,000 was direct labor and $5,900 was indirect labor.
5. Manufacturing overhead costs incurred on account were $80,500.
6. Depreciation on the company's office building was $8,100.
7. Manufacturing overhead was applied at the rate of 150% of direct labor cost.
8. Goods costing $88,000 were completed and transferred to finished goods.
9. Finished goods costing $75,000 to manufacture were sold on account for $103,000.

Requried:
a. Journalize the transactions.
b. Prepare entries for manufacturing and nonmanufacturing costs.

Answer 1

No. Account Titles and Description Debit$ Credit$

1 Raw Material Inventory 46300

Account Payable 46300

(To record purchase on credit)

2 . Work in Process Inventory 29200

Manufacturing overhead 6800

Raw Material Inventory 36000

(To record acquisition of raw materials)

3 . Factory Labor 59900

Factory Wages Payable 51000

Employer Payroll Taxes Payable 8900

(To record wages and payroll taxes payable)

4 Work in Process Inventory 54000

Manufacturing overhead 5900

Factory Labor 59900

(To record direct and indirect labor)

5 . Manufacturing overhead 80500

Account payable 80500

(To record manufacturing overhead on credit)

6 . Depreciation Expense 8100

Accumulated Depreciation—Building 8100

(To record depreciation)

7. Work in Process Inventory 81000

($54,000 X 150%)

Manufacturing overhead applied 81000

( To record the application of overhead)

8 Finished Goods 88000

Work in Process Inventory 88000

(To record the goods transferred to finished goods)

9. Accounts Receivable 103000

Sales Revenue 103000

(To record sales made on credit)

Cost of Goods Sold 75000

Finished Goods Inventory 75000

(To record cost of goods sold)