Larned Corporation recorded the following transactions for the just completed month. $72,000 in raw materials were purchased on account. $70,000 in raw materials were used in production. Of this amount, $62,000 was for direct materials and the remainder was for indirect materials. Total labor wages of $106,000 were paid in cash. Of this amount, $102,200 was for direct labor and the remainder was for indirect labor. Depreciation of $193,000 was incurred on factory equipment.

Required:
Record the above transactions in journal entries.

Larned Corporation

Journal Entries

Sr. No                   Account                     Debit                  Credit

1                          Materials                     $72,000

                     Accounts Payable                                      $72,000

$72,000 in raw materials were purchased on account.

2                   Work in Process              $62,000

                     Materials  Inventory                                $62,000

$70,000 in raw materials were used in production. Of this amount, $62,000 was for direct materials

3                 Manufacturing Overheads  $8000

                      Materials Inventory                                  $ 8000

$70,000 in raw materials were used in production. Of this amount, $62,000 was for direct materials and the remainder was for indirect materials.

4                Work In Process               $ 102,000

                    Payroll ( Direct Labor )                            $102,000

$102,200 was for direct labor

5                  Manufacturing Overheads   $3800

                    Payroll (Indirect  Labor)                               $3800

Total labor wages of $106,000 were paid in cash. Of this amount, $102,200 was for direct labor and the remainder was for indirect labor.

6                Depreciation                     $193,000

                     Factory Overhead Control Account        $193,000

Depreciation of $193,000 was incurred on factory equipment.

answertaxable income;