Torn Baker manufactures custom teakwood patio furniture. Suppose Baker has the

following transactions:

a. Purchased raw materials on account, $135,000.

b. Materials costing $130,000 were requisitioned (used) for production. Of .this total, $30,000 were indirect materials.

c. Labor records show that direct labor of $22,000 and indirect labor of $5,000 were incurred (but not yet paid).

d. Assigned labor cost to work in process and manufacturing overhead.

Requirement

1. Prepare journal entries for each transaction. Then explain each journal entry in terms of what got increased and what got decreased.