Chapter 2 Handout

Chapter 2 Handout - Recorded depreciation on the machine...

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ACC 200 Chapter 2 Handout 1 REQUIRED : 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 the 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.
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Unformatted text preview: 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 manufacture. (Hint: 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: Direct Material (DM) or Work-in-Process (WIP). DM has its own account, while Direct Labor (DL) and Manufacturing Overhead (MOH) are recorded in the WIP account. If it is a PERIOD cost, follow the same rules learned in the course pack. ACC 200 Chapter 2 Handout 2 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. b. c. d. e. f. g. h. i. j. k. l. m. n. n. Bal....
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This note was uploaded on 03/10/2011 for the course ACC 200 taught by Professor Buckless during the Spring '08 term at N.C. State.

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Chapter 2 Handout - Recorded depreciation on the machine...

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