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Q18E

Expert-verified
Horngren'S Financial And Managerial Accounting
Found in: Page 942

Short Answer

Goldenrod Company makes artificial flowers and reports the following data for the month:

Purchases of materials, on account

$51,000

Materials requisition:

Direct material

42,300

Indirect materials

500

Labor incurred (not yet paid):

Direct labor

20,300

Indirect labor

1,340

Journalize the entries relating to materials and labor.

Date

Particulars

Debit ($)

Credit ($)

1

Work-in-process inventory (direct material)

42,300

Manufacturing overhead (indirect material)

500

Raw material inventory

42,800

2

Work-in-process inventory (direct labor)

20,300

Manufacturing overhead (indirect labor)

1,340

Wages payable

21,640

See the step by step solution

Step by Step Solution

Step 1: Manufacturing overhead

Manufacturing overhead includes all the indirect cost incurred by the company while manufacturing the product of the company.

Step 2: Recording of direct or indirect material of labor.

The direct material or labor are debited as the work in process inventory and the indirect material or labor are debited as the manufacturing overhead.And, for the material cost, raw material inventory should be credited. And for the labor cost, wages payable should be credited.

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