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Chapter_2_Handout_solution - manufacture(Record this as two...

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ACC 200 Chapter 2 Handout Solution Record the following transactions for the month of September. Assume the accrual basis of accounting. a. Purchased $10,000 worth of raw materials (lumber) on account. b. Moved $8,000 of lumber into production (transfer from RM Inventory to WIP c. Paid direct labor costs of $3,000. d. Paid factory supervisor salary of $200. e. Paid utilities expense (for factory) of $300. f. Paid for repairs and maintenance of factory equipment totaling $500. g. Purchased indirect factory materials costing $250. h. Paid $400 for advertising for the current month. i. Paid utilities expense (for the administrative office) in the amount of $1,000 j. Paid salary of human resource manager of $200. k.. Purchased a factory machine for $25,000 by signing a one-year note payable. Machine has an estimated 5 year life with no residual salvage value. l. Recorded depreciation on the machine for the month using straight line depreciation. m. Finished $17,000 of furniture that was in process n. Sold furniture for $27,000 cash. The furniture cost $18,000 to
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Unformatted text preview: manufacture (Record this as two separate transactions) Hints: Every cost that is incurred has to be classified as either a PRODUCT or a PERIOD cost. If it is a PRODUCT cost, you will be recording the cost in one of the following asset accounts: DM or WIP. DM has its own account, while DL and MOH are recorded in the WIP account. If it is a PERIOD cost, follow the same rules learned in the course pack. 1 Cash DM WIP FG Machine = NP AP + CS RE Revenue Expense Beg 14,000 2,000 8,000 3,000 500 15,000 11,500 a. +10,000 +10,000 b.-8,000 +8,000(DM used) c.-3,000 +3,000 (DL) d.-200 +200 (MOH) e.-300 +300 (MOH) f.-500 +500 (MOH) g.-250 +250 (MOH) h.-400-400 400 Adver i.-1,000-1,000 1,000 Utilities j-200-200 200 Salary k. +25,000 +25,000 l. +417 (MOH)-417 m.-17,000 +17,000 n. 27,000 27,000 27,000 Sales n.-18,000-18,000 18,000 COGS Bal. 35,150 4,000 3,667 2,000 24,583 25,000 10,500 15,000 18,900 27,000 19,600 2...
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Chapter_2_Handout_solution - manufacture(Record this as two...

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