Prepare Journal Entries for the Following Transactions Related to a Manufacturing

Essay

Prepare journal entries for the following transactions related to a manufacturing operation.
a. The firm acquires manufacturing equipment for $45,000 cash.
b. The firm purchases raw materials costing $36,000 on account.
c. The firm issues raw materials costing $15,000 to the production department.
d. Payroll of $35,000 is paid: $20,000 to direct factory workers and $15,000 to sales personnel.
e. Utilities of $1,000 are paid: $300 for manufacturing equipment, $500 for factory building, and $200 for the administrative offices.
f. Depreciation on the building and equipment is as follows: Factory building $4,550, manufacturing equipment $500, and sales and administration building $1,000.
g. Units completed and transferred to finished goods total $37,000.
h. Cost of goods sold for the period is $40,000.