Question: Prepare summary journal entries to record the following transactions and events a through g for a company in its first month of operations.
a. Raw materials purchased on account, $90,000.
b. Direct materials used in production, $36,500. Indirect materials used in production, $19,200.
c. Paid cash for factory payroll, $50,000. Of this total, $38,000 is for direct labor and $12,000 is for indirect labor.
d. Paid cash for other actual overhead costs, $11,475.
e. Applied overhead at the rate of 125% of direct labor cost.
f. Transferred cost of jobs completed to finished goods, $56,800.
g. Sold jobs on account for $82,000. The jobs had a cost of $56,800.