RC Corp. uses a job order cost accounting system. During the month of April, the following events occurred:
(a) Purchased raw materials on credit, $32,000.
(b) Raw materials requisitioned: $25,800 as direct materials and $10,500 indirect materials.
(c) Paid factory payroll for the month totaling $37,700 which includes $8,200 indirect labor.
(d) Assigned the factory payroll to jobs and overhead.
Make the necessary journal entries to record the above transactions and events. (Use letters above as dates.
Letter A raw materials inventory 32,000
Letter A accounts payable 32,000
Letter B Goods in process inventory 25,800
Letter B factory overhead 10,500
Letter B raw materials inventory 36,300
Letter C factory payroll 37,700
Letter C cash 37,700
Letter D good in process inventory 29,500
Letter D factory overhead 8,200
Letter D factory payroll 37,700
To record the above transactions and events, we would need to make the following journal entries:
(a) Purchased raw materials on credit, $32,000:
Raw Materials Inventory (debit) - $32,000
Accounts Payable (credit) - $32,000
(b) Raw materials requisitioned: $25,800 as direct materials and $10,500 indirect materials:
Work in Process Inventory (debit) - $25,800 (for direct materials)
Manufacturing Overhead (debit) - $10,500 (for indirect materials)
Raw Materials Inventory (credit) - $36,300 (sum of direct and indirect materials)
(c) Paid factory payroll for the month totaling $37,700 which includes $8,200 indirect labor:
Factory Payroll (debit) - $37,700
Cash (credit) - $37,700
(d) Assigned the factory payroll to jobs and overhead:
Work in Process Inventory (debit) - amount assigned to specific jobs
Manufacturing Overhead (debit) - amount assigned to manufacturing overhead
Factory Payroll (credit) - total factory payroll
Note: The specific amounts to be debited to Work in Process Inventory and Manufacturing Overhead will depend on the allocation method used, such as direct labor hours or machine hours. These amounts will need to be calculated based on the allocation rate and the actual hours worked on each job.
To record the above transactions and events, the following journal entries are required:
(a) To record the purchase of raw materials on credit:
Date Accounts Debit Credit
-----------------------------------------------
(a) Raw Materials Inventory $32,000
Accounts Payable $32,000
(b) To record the requisition of direct and indirect raw materials:
Date Accounts Debit Credit
--------------------------------------------------------------
(b) Work in Process Inventory $25,800
Raw Materials Inventory $25,800
(b) Factory Overhead $10,500
Raw Materials Inventory $10,500
(c) To record the payment of factory payroll, including indirect labor:
Date Accounts Debit Credit
------------------------------------------------------------------
(c) Factory Payroll $37,700
Cash $37,700
(d) To assign the factory payroll to jobs and overhead:
Date Accounts Debit Credit
---------------------------------------------------------------
(d) Work in Process Inventory $29,500
Factory Overhead $8,200
Cash $37,700
Note: In the above entries, the amounts for direct labor have not been provided. If the direct labor cost is known, it should be separately recorded and assigned to the appropriate jobs.