Question

Guardino Company manufactures a single product by a continuous process, involving three production departments. The records indicate that direct materials, direct labor, and applied factory overhead for Department 1 were $100,000, $125,000, and $150,000, respectively. The records further indicate that direct materials, direct labor, and applied factory overhead for Department 2 were $50,000, $60,000, and $70,000, respectively. In addition, work in process at the beginning of the period for Department 1 totaled $75,000, and work in process at the end of the period totaled $60,000.

The journal entry to record the flow of costs into Department 2 during the period for direct labor is:

Answer 1

Answer:

Debit WIP - department 2 $60.000

                                         Credit Wages payable $60,000

Explanation:

The journal entry to record the flow of costs into Department 2 during the period for direct labor is the following:

Debit WIP - department 2 $60.000

                                         Credit Wages payable $60,000

Because the labor expense incurred in Department 2 is $60,000, hence we have to debit the WIP- department 2 for an amount of $60,000 and we would have to credit to Wages payable for $60,000 .