Factory Ledger; Journal Entries The home offices of the Splitpea Company are in Chicago, but the manufacturing operations are located in Gary. The company uses a separate factory ledger, which is maintained at Gary for the benefit of the plant management. The factory is given credit for finished goods when the goods are shipped to the central warehouses. All goods are shipped to customers from the warehouses.

Some transactions for the month of March 19-6 are summarized below:

1. Miscellaneous manufacturing expenses incurred—$10,000. The invoices for

$10,000 were received.

. Materials received by the factory (proper invoice received)—$75,000.

. Sales to customers billed during March—$90,000.

. Factory cost of goods sold—$70,000.

. Direct materials placed into production—$50,000.

Questions 6-8 refer to certain discrepancies that were found upon auditing the reconciliation accounts. You are to select the entry (or entries) that would correct the general-ledger accounts involved.

6. Salesmen’s salaries of $2,000 were incorrectly charged to ManufacturingExpense Control 7. Machinery of $1,200 purchased by the home office for the branch was taken up in the branch books as a Stores item.

8. The machinery in 7 had been ignored in computing depreciation for one month (rate, 1 percent per month).

CO NOe HOME OFFICE FACTORY CODE ACCOUNTS CODE ACCOUNTS 1 Cash in bank A Material-stores control Work-in-process control Manufacturing-expense control Manufacturing expense applied Home-office-ledger control Direct-labor control 2 Accounts receivable 3 Finished goods 4 Accounts payable 5 Accrued payroll 6

7 8

Common stock wa m™mogd Retained earnings Factory-ledger control 9 Sales 10 Factory cost of goods sold 11 Selling-cost control 2 Administrative-cost control 13 Plant and equipment control 14 Allowance for depreciation For each of the eight transactions, indicate by code the accounts debited and credited in the factory ledger and the home ledger. Use the account codes given. More than one account may be debited or credited for each entry. lo1