Question

During July at Loeb Corporation, $83,000 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 $4,000. The journal entry to record the requisition form the storeroom would include a:A. Debit to work in process of $79,000B. Debit to work in process of $83,000C. Credit to manufacturing overhead of $4,000D. Debit to raw materials of $83,000

Answer 1

Answer:

a:A. Debit to work in process of $79,000

Explanation:

The requisitioned materials will decrease the raw material inventory thus, it will be credited for 83,000

while the direct materials will be capitalized through WIP as later become Finished good and become cash once sale and collected.

The indirect materials will be assigned into actual manufacturing overhead which means, posted in the debit side (credit stands for applied overhead)

So the entry will be:

WIP                     79,000 debit

factory overhead 4,000 debit

          materials                      83,000 credit

this makes option A correct