Question
The following information applies to Questions 1 to 7. The following transactions occurred in August at Barbara Cabinets, a custom cabinet firm: Purchased $70,000 of
The following information applies to Questions 1 to 7.
The following transactions occurred in August at Barbara Cabinets, a custom cabinet firm:
- Purchased $70,000 of materials on account.
- Issued $3,000 of supplies from the materials inventory.
- Purchased $50,000 of materials on account.
- Paid for the materials purchased in transaction (1).
- Issued $62,000 in direct materials to the production department.
- Incurred direct labor costs of $115,000, which were credited to Wages Payable.
- Paid $106,000 cash for utilities, power, equipment maintenance, and other miscellaneous items for the manufacturing plant.
- Applied manufacturing overhead on the basis of 125 percent of $100,000 direct labor costs.
- Recognized depreciation on manufacturing property, plant and equipment of $50,000.
Question 1 - What is the journal entry to record (1) above?
Group of answer choices
A. Debit Accounts Payable $70,000, Credit Materials Inventory $70,000
B. Debit Cash $70,000, Credit Materials Inventory $70,000
C. Debit Materials Inventory $70,000, Credit Accounts Payable $70,000
D. Debit Materials Inventory $70,000, Credit Cash $70,000
The following information applies to Questions 1 to 7.
The following transactions occurred in August at Barbara Cabinets, a custom cabinet firm:
- Purchased $70,000 of materials on account.
- Issued $3,000 of supplies from the materials inventory.
- Purchased $50,000 of materials on account.
- Paid for the materials purchased in transaction (1).
- Issued $62,000 in direct materials to the production department.
- Incurred direct labor costs of $115,000, which were credited to Wages Payable.
- Paid $106,000 cash for utilities, power, equipment maintenance, and other miscellaneous items for the manufacturing plant.
- Applied manufacturing overhead on the basis of 125 percent of $100,000 direct labor costs.
- Recognized depreciation on manufacturing property, plant and equipment of $50,000.
Question 2 - What is the journal entry to record (2) above?
Group of answer choices
A. Debit Accounts Payable $3,000, Credit Manufacturing Overhead $3,000
B. Debit Cash $3,000, Credit Property, Plant and Equipment $3,000
C. Debit Materials Inventory $3,000, Credit Cash $3,000
D. Debit Manufacturing Overhead $3,000, Credit Materials Inventory $3,000
The following information applies to Questions 1 to 7.
The following transactions occurred in August at Barbara Cabinets, a custom cabinet firm:
- Purchased $70,000 of materials on account.
- Issued $3,000 of supplies from the materials inventory.
- Purchased $50,000 of materials on account.
- Paid for the materials purchased in transaction (1).
- Issued $62,000 in direct materials to the production department.
- Incurred direct labor costs of $115,000, which were credited to Wages Payable.
- Paid $106,000 cash for utilities, power, equipment maintenance, and other miscellaneous items for the manufacturing plant.
- Applied manufacturing overhead on the basis of 125 percent of $100,000 direct labor costs.
- Recognized depreciation on manufacturing property, plant and equipment of $50,000.
Question 3 - What is the journal entry to record (3) above?
Group of answer choices
A. No journal entry is recorded.
B. Debit Work-in-Process $50,000 and credit Accounts Receivable $50,000.
C. Debit Materials Inventory $50,000 and credit Accounts Payable $50,000.
D. Debit Cash $50,000 and credit Materials Inventory $50,000.
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