Reference no: EM132551148

Question 1: Consider the following transactions for a company and prepare the necessary journal entries assuming perpetual inventory system is used.

a. Materials purchased on account $140,000

b. Materials requisitioned:

Direct..............$85,000

Indirect............$15,000

c. Total payroll of the company for a period $ 180,000. Payroll was paid after deducting 12% income tax and 7% pension contribution.

d. The distribution of the payroll was:

Direct labor..............60% Marketing Department................18%

Indirect labor............15% Administrative Department...........7%

e. Other factory overhead consists of:

Depreciation...............$8,500

Insurance Expired.........$1,200

Others general factory overhead costs $26,340, 70% paid in cash.

f. Factory overhead accumulated in FOH control account was transferred to the work in process account.

g. Work completed and transferred to finished goods $120,000

h. Sales for the period total $100,000, 40% received in cash and 75% of the sales price represents cost of goods sold.