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Q28E

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Horngren'S Financial And Managerial Accounting
Found in: Page 1015

Short Answer

Oxford Company had the following transactions in October:

1. Purchased raw materials on account, $70,000

2. Used materials in production: $26,000 in the Mixing Department; $14,000 in the

Packaging Department; $1,000 in indirect materials

3. Incurred labor costs: $8,000 in the Mixing Department; $7,200 in the Packaging

Department; $2,200 in indirect labor

4. Incurred manufacturing overhead costs: $3,500 in machinery depreciation; paid

$2,300 for rent and $1,590 for utilities

Prepare the journal entries for Oxford Company.

The journal entries to record the purchase of Raw material, uses of raw material, labor cost and manufacturing overhead are shown in step 2.

See the step by step solution

Step by Step Solution

Step-by-Step Solution:Step 1: Manufacturing Process

The manufacturing process means the process of producing the products. It is done by using the raw material which is converted by applying the conversion cost into the final product.

Step 2: Journal entries to record the transactions

Date

Particulars

Debit ($)

Credit ($)

1.

Raw material

70,000

Account payable

70,000

2.

Work-in-process inventory-Mixing department

26,000

Work-in-process inventory-Packaging department

14,000

Manufacturing overhead

1,000

Raw material

41,000

3.

Work-in-process inventory-Mixing department

8,000

Work-in-process inventory-Packaging department

7,200

Manufacturing overhead

2,200

Wages payable

17,400

4.

Manufacturing overhead

3,500

Accumulated depreciation

3,500

5.

Manufacturing overhead

3,890

Cash (2,300+1,590)

3,890

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