Answer to Question #226898 in Accounting for mafi

Question

Ligba furniture is a furniture mfg firm that uses job order costing.the company's inventory balance on Jan 1,the beginning of its fiscal year as follows

raw material br40000

work in process 30000

finished goods 60000

a.raw materials were purchased on account for br 800000

b.raw materials were transferred in to production br 764000

c.the following cost were incurred for employee services DL br 150000

indirect labor 220000

d. factory utility cost were incurred in the factory br 86000

e.MOH was applied to production 960000

f.goods costing br 1800000 were completed and transferred to warehouse

g.goods were sold on account to customers during the year at selling price of br 3000000.the goods cost br 1748000 to manufacture according to there job cost sheets .

instructions:-prepare journal entry to record preceding transaction

Answer 1

Answer:

Ligba Furniture

General Journal

Date Description Post Ref. Debit (br) Credit (br)

(a) Purchases (Raw materials) acc. 800,000

Creditor/Supplier acc. 800,000

(Record of credit purchase of raw materials)

(b) Work in Progress (WIP) acc. 764,000

Purchases acc. 764,000

(Record of raw materials transfer to WIP)

(d) Wages: Direct Labor (DL) acc. 150,000

Indirect labor acc. 220,000

Bank acc. 370,000

(Record of Labor cost paid by cheque/bank)

(e) Work in Progress acc. 960,000

Manufacturing Over-head (MOH) acc. 960,000

(Record of MOH expenses added

to production/WIP)

(f) Finished goods (Inventory) acc. 1,800,000

Work in Progress (WIP) acc. 1,800,000

(Record of transfer of finished goods)

(g) Bank acc. 3,000,000

Finished goods (Inventory) acc. 1,748,000

Gain (profit) from the sales 1,252,000

(Record of sale of finished goods

/inventory at a profit)

TOTAL 7,694,000 7,694,000