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28 October, 12:59

During the current month, a company that uses job order costing purchases $82,000 in raw materials for cash. It then uses $23,000 of raw materials indirectly as factory supplies and uses $50,600 of raw materials as direct materials. Prepare journal entries to record these three transactions

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  1. 28 October, 14:51
    0
    Dr. Material Inventory $82,000

    Cr. Cash $82,000

    Dr. Work in Process Inventory $50,600

    Dr. Manufacturing Overhead $23,000

    Cr. Material Inventory $82,000

    Explanation:

    Purchases of Inventory is recorded in the material inventory account by debit entry, because inventory is an asset and it requires a debit entry to increase the inventory level. cash is paid so it is credited.

    Direct raw material used will be transferred to Work in process account and Indirect raw material used will be transferred to Manufacturing overhead account by a debit the these accounts and credit to material Inventory account.
  2. 28 October, 16:56
    0
    See the explanation below:

    Explanation:

    Details Dr ($) Cr ($)

    Inventory of raw materials 82,000

    Cash 82,000

    Being the purchase of raw materials

    Factory overhead 23,000

    Inventory of raw materials 23,000

    Being the raw materials used indirectly as factory supplies

    Work-in-Progress 50,600

    Inventory of raw materials 50,600

    Being the raw materials used directly in production
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