Explanation Pass the journal entries to record the transactions Purchase of raw material: Company purchased raw materials worth of $70,700 which includes purchase of canvas of $70,000 and purchase of thread of $700. Whenever company purchases raw material, raw material inventory account and accounts payable account will be impacted. Raw material inventory account is an asset account and with the purchase transaction its balance will increase therefore, it will be debited in the books. Accounts payable is a liability account and its balance will increase with the purchases, therefore it will be credited. The credit balance of accounts payable shows the amount that company owes to its suppliers. Date Accounting title and explanation Post Ref Debit ($) Credit ($) Raw materials inventory $70,700 (Canvas: $70,000 and thread: $700) Accounts Payable $70,700 (to record purchase of raw materials on account) Table (1) Material requisitioned from the store to production facility: Whenever production managers need some raw material they fill out the material requisition to the store room. After receiving material requisition, storeroom will pick up those raw materials and send it to the factory. Once the material sent into production, they become the part of work in process inventory. The cost of these materials moved out of raw material inventory account to work in process inventory account. Both raw material inventory and work in process inventory are asset account. Raw material inventory accounts balance is decreasing as materials moved out of the raw material inventory, therefore, it will be credited. Whereas work in process inventory account balance is increasing as materials moved in production, therefore, it will be debited...

5th Edition

ISBN: 9780134128528

Author: Karen W. Braun, Wendy M. Tietz

Publisher: PEARSON

See similar textbooks

Concept explainers

Process Costing

Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.

Job Costing

Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing …

ABC Costing

Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In compari…

Videos

Question

Chapter 3, Problem 3.12SE

To determine

To prepare: Prepare the journal entries to record the transactions and prepare the raw material inventory account. Also determine the ending balance of raw material inventory account.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Chapter 3, Problem 3.11SE

Chapter 3, Problem 3.13SE

Students have asked these similar questions

All School Logos & More (ASLM) design and manufacture school uniform crests. After production,the crests are placed into individual plastic cases, before being transferred into Finished Goods. Theaccounting records of the business for the quarter to December 31, 2021, for the manufacturing of uniformcrests for Hill Point High School are given below.Inventory 1/10/2021 31/12/2021Raw Materials $72,000 $65,000Work in Progress $138,875 $129,125Finished Goods $149,500 $141,700Other information:Sales Revenue $1,694,950Factory Labour 239,700Raw Materials Purchased 235,000Office Cleaner’s Wages 4,500Factory Supplies Used 23,500Depreciation: Factory Plant & Equipment 32,000Total Utilities 1 118,750Plant Supervisor’s Salary 180,000Design Costs (School Logo) 4,300Packaging Material Cost 35,000Total Insurance 2 60,000Delivery Vehicle Drivers’ Wages 41,250Depreciation: Delivery Vehicle 7,250Property Taxes 3 105,000Administrative Wages & Salaries 123,750Sales Commission 2% of Net Profit…

Chapter 3 Solutions

Managerial Accounting (5th Edition)

Ch. 3 - (Learning Objective 1) For which of the following...Ch. 3 - (Learning Objective 2) Which of the following...Ch. 3 - (Learning Objective 2) Which of the following...Ch. 3 - (Learning Objective 3) The amount of manufacturing...Ch. 3 - (Learning Objective 4) Which of the following is...Ch. 3 - (Learning Objective 5) Which of the following is...Ch. 3 - (Learning Objective 5) Assuming the amount of...Ch. 3 - Prob. 8QC Ch. 3 - Prob. 9QC Ch. 3 - Prob. 10QC

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Prepare the journal entries to record the transactions and prepare the raw material inventory account. Also determine the ending balance of raw material inventory account.

Solution Summary: The author explains how to prepare journal entries to record transactions and prepare the raw material inventory account.

Concept explainers

Videos

To prepare: Prepare the journal entries to record the transactions and prepare the raw material inventory account. Also determine the ending balance of raw material inventory account.

Want to see the full answer?

Chapter 3 Solutions