Answer to Question #227267 in Accounting for mafi

Question

1.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

Journal entries

a) Dr Raw Materials br 800000

Cr Creditors br 800000

b) Dr Work in Process br 764000

Cr Raw Materials br 764000

c) Dr employee services DL br 150000

Cr Employee Account Payable br 150000

Dr indirect labor br 220000

Cr Wages payable br 220000

d) Dr factory utility cost br 86000

Cr Factory overheads payable br 86000

e) Dr Production MOH br 960,000

Cr Production overheads account payable br 960,000

f) Dr Finished goods Inventory br 1800000

Cr Work in Process Inventory br 1800000

g) Dr Accounts Receivable br 3000000

Cr Sales br 3000000

Dr Sales br 1748000

Cr Revenue/Profits generated br 1252000

Cr Costs of goods sold br 1748000