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3 February, 06:05

Hotwax makes surfboard wax in a single operation. This period, Hotwax purchased $73,000 in raw materials. Its production department requisitioned $60,500 of those materials for use in production. Prepare journal entries to record its purchase of raw materials and direct materials.

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  1. 3 February, 06:46
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    a. For raw material purchased:

    Debit: Inventory - raw materials with $73,000,

    Credit: cash with $73,00.

    b. For raw material issued:

    Debit: Work-in-Progress with $60,500

    Credit: Inventory - raw materials with $65,500

    Explanation:

    Hotwax's journal entries for this will appear as follows in the book.

    Details Dr ($) Cr ($)

    Inventory - Raw materials 73,000

    Cash 73,000

    Being the purchase of raw materials inventory in cash

    Work-in-Progress 60,500

    Inventory - Raw materials 60,500

    Being the issue of raw materials for production
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