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24E-b

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Horngren'S Financial And Managerial Accounting
Found in: Page 945

Short Answer

Question: Journalize the following transactions for Marge’s Sofas. Explanations are not required.

b. Incurred manufacturing wages of $15,000, 75% of which was direct labor and

25% of which was indirect labor.

Date

Particulars

Debit ($)

Credit ($)

Work-in-process inventory (75% of $15,000)

11,250

Manufacturing overhead (25% of $15,000)

3,750

Wages payable

15,000

See the step by step solution

Step by Step Solution

Step-by-Step Solution:Step 1: Wages payable

Wages payable is defined as the current liability of the company which shows the amount due to employees but not paid during the year.

Step 2: Recording of direct or indirect labor expenses in the books of the company

The labor wages incurred by the company is recorded in the books by debiting the direct labor cost as work in process, indirect labor cost as manufacturing overhead and crediting the wages payable account.

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