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Crawford Corporation incurred the following transactions.

1. Purchased raw materials on account $52,200.
2. Raw Materials of $42,600 were requisitioned to the factory. An analysis of the materials requisition slips indicated that $8,500 was classified as indirect materials.
3. Factory labor costs incurred were $60,700, of which $50,200 pertained to factory wages payable and $10,500 pertained to employer payroll taxes payable.
4. Time tickets indicated that $55,000 was direct labor and $5,700 was indirect labor.
5. Manufacturing overhead costs incurred on account were $81,500.
6. Depreciation on the company’s office building was $8,500.
7. Manufacturing overhead was applied at the rate of 150% of direct labor cost.
8. Goods costing $93,200 were completed and transferred to finished goods.
9. Finished goods costing $84,300 to manufacture were sold on account for $113,200.

Journalize the transactions. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

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Answer:

1. Purchased raw materials on account $52,200

Raw Materials $52200 (debit)

Accounts Payable $52200(credit)

2. Raw Materials of $42,600 were requisitioned to the factory. An analysis of the materials requisition slips indicated that $8,500 was classified as indirect materials.

Cost of Goods Manufactured $42600(debit)

Materials - Indirect $ 8500(credit)

Materials - Direct $34100(credit)

3. Factory labor costs incurred were $60,700, of which $50,200 pertained to factory wages payable and $10,500 pertained to employer payroll taxes payable.

Cost of Goods Manufactured $50200 (debit)

Salaries and Wages Expense $10500 (debit)

Salaries and Wages Payable $60700 (credit)

4. Time tickets indicated that $55,000 was direct labor and $5,700 was indirect labor.

Salaries and Wages  $60700 (debit)

Direct Labor Indirect labor $55000(debit)

Indirect Labor $5700(credit)

5. Manufacturing overhead costs incurred on account were $81,500.

Cost of Goods Manufactured $81500(credit)

Accounts Payable $81500(credit)

8. Goods costing $93,200 were completed and transferred to finished goods.

Finished Goods Inventory $93200(debit)

Cost of Manufactured Goods $93200(credit)

9. Finished goods costing $84,300 to manufacture were sold on account for $113,200.

(a)Recognition of Cost of goods sold

Cost of Goods Sold $ 84300 (debit)

Finished Goods Inventory $84300(credit)

(b)Recognition of Revenue

Trade Receivables $113200(debit)

Revenue $113200(credit)

Explanation:

1. Purchased raw materials on account $52,200

Recognise an Asset - Raw Materials Inventory.Recognise a Liability - Accounts Payable

2. Raw Materials of $42,600 were requisitioned to the factory. An analysis of the materials requisition slips indicated that $8,500 was classified as indirect materials.

Recognise an expense - Cost of Goods Manufactured. Derecognise Asset - Materials (both direct and indirect)

3. Factory labor costs incurred were $60,700, of which $50,200 pertained to factory wages payable and $10,500 pertained to employer payroll taxes payable.

Recognise two expense accounts - Cost of Goods Manufactured for Overheads and Salaries and Wages Expense - for Periodic/Non Manufacturing Costs. Recognise a Liability - Salaries and Wages Payable

4. Time tickets indicated that $55,000 was direct labor and $5,700 was indirect labor.

Recognise the liabilty Salaries and Wages and the Expense Direct and Indirect Labor

5. Manufacturing overhead costs incurred on account were $81,500.

Cost of Goods Manufactured $81500(credit)

Accounts Payable $81500(credit)

8. Goods costing $93,200 were completed and transferred to finished goods.

Finished Goods Inventory $93200(debit)

Cost of Manufactured Goods $93200(credit)

9. Finished goods costing $84,300 to manufacture were sold on account for $113,200.

(a)Recognition of Cost of goods sold

Cost of Goods Sold $ 84300 (debit)

Finished Goods Inventory $84300(credit)

(b)Recognition of Revenue

Trade Receivables $113200(debit)

Revenue $113200(credit)

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