Question

Fort Corporation had the following transactions during its first month of operations
1. Purchased raw materials on account, $85,000. 2. Raw Materials of $30,000 were requisitioned to the factory. An analysis of the materials requisition slips indicated that $6,000 was classified as indirect materials. 3. Factory labor costs incurred were $175,000 of which $145,000 pertained to factory wages payable and $30,000 pertained to employer payroll taxes payable. 4. Time tickets indicated that $145,000 was direct labor and $30,000 was indirect labor. 5. Overhead costs incurred on account were $198,000. 6. Manufacturing overhead was applied at the rate of 150% of direct labor cost. 7. Goods costing $115,000 are still incomplete at the end of the month; the other goods were completed and transferred to finished goods. 8. Finished goods costing $100,000 to manufacture were sold on account for $130,000.
Journalize the above transactions for Fort Corporation. (Record journal entries in the order presented in the problem. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Debit Credit No. Account Titles and Explanation
1.
2.
3.
4.
5.
6.
7.
8.

Answer 1

Answer:

        Account title and description                              Debit                 Credit

         Raw materials inventory                                   $85,000

         Accounts Payable                                                                       $85,000

        Account title and description                             Debit                  Credit

       Work in Process                                                  $24,000

       Manufacturing overhead                                    $6,000

       Raw materials inventory                                                              $30,000

        Account title and description                            Debit                  Credit

       Factory Labor                                                     $175,000  

       Factory wages payable                                                               $145,000

       Payroll taxes payable                                                                    $30,000

        Account title and description                            Debit                  Credit

       Work in process Inventory                                 $145,000  

       Manufacturing overhead                                    $30,000  

       Factory Labor                                                                               $175,000

        Account title and description                             Debit                  Credit

       Manufacturing overhead                                   $198,000  

       Accounts payable                                                                        $198,000

       Account title and description                              Debit                  Credit

       Work in process Inventory                                $217,500  

       Manufacturing overhead                                                             $217,500

Working

= 145,000 * 150% = $217,500

      Account title and description                              Debit                  Credit

       Finished goods Inventory                                $271,500  

       Work in process Inventory                                                           $271,500

Working

= 24,000 + 145,000 + 217,500 - 115,000 = $271,500

       Account title and description                              Debit                  Credit

       Account receivables                                         $130,000  

      Sales                                                                                              $130,000

   

       Cost of goods sold                                           $100,000  

       Finished goods Inventory                                                          $100,000