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27 June, 03:34

Starr Company reports the following information for August. Raw materials purchased on account$81,000 Direct materials used in production$59,800 Factory wages earned (direct labor) $18,650 Overhead rate 135% of direct labor cost Prepare journal entries to record the following events. 1. Raw materials purchased. 2. Direct materials used in production. 3. Direct labor used in production. 4. Applied overhead.

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  1. 27 June, 05:29
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    The journal entries are as follows

    1. Raw materials inventory A/c Dr $81,000

    To Accounts payable A/c $81,000

    (Being the raw material purchase on account is recorded)

    2. Work in process inventory A/c Dr $59,800

    To Raw materials inventory A/c $59,800

    (Being the direct material used is recorded)

    3. Work in progress A/c Dr $18,650

    To Wages payable A/c $18,650

    (Being the direct labor used is recorded)

    4. Work in progress A/c Dr $25,177.50

    To Manufacturing overhead A/c $25,177.50

    (Being the applied overhead is recorded)

    It is computed below:

    = $18,650 * 135%

    = $25,177.50
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