During the current month, Sheffield Company incurs the following manufacturing costs. (a) Purchased raw materials of $17,800 on account. (b) Incurred factory labor of $40,700. Of that amount, $30,600 relates to wages payable and $10,100 relates to payroll taxes payable. (c) Factory utilities of $3,900 are payable, prepaid factory property taxes of $2,800 have expired, and depreciation on the factory building is $9,800. Prepare journal entries for each type of manufacturing cost. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Question

Business

Leia Weiss

26 December, 05:19

During the current month, Sheffield Company incurs the following manufacturing costs. (a) Purchased raw materials of $17,800 on account. (b) Incurred factory labor of $40,700. Of that amount, $30,600 relates to wages payable and $10,100 relates to payroll taxes payable. (c) Factory utilities of $3,900 are payable, prepaid factory property taxes of $2,800 have expired, and depreciation on the factory building is $9,800. Prepare journal entries for each type of manufacturing cost. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

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Justus Carson · Answer 1

The journal entries are shown below:

a. Raw material inventory A/c Dr $17,800

To Accounts payable A/c $17,800

(Being raw material is purchased on credit)

b. Factory labor A/c Dr $40,700

To Factory wages payable $30,600

To Payroll taxes payable $10,100

(Being factor labor cost is recorded)

c. Manufacturing overhead A/c Dr $16,500

To Factory utility payable A/c $3,900

To Prepaid factory property taxes A/c $2,800

To Factory building - accumulated depreciation $9,800

(Being manufacturing overhead cost recorded)