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2 August, 22:57

Adelphia Manufacturing issued $70,000 of direct materials and $10,000 of indirect materials for production. Which of the following journal entries would correctly record the transaction?

A) Raw Materials Inventory 80,000

Finished Goods Inventory 70,000

Work-in-Process Inventory 10,000

B) Work-in-Process Inventory 80,000

Raw Materials Inventory 80,000

C) Work-in-Process Inventory 70,000

Manufacturing Overhead 10,000

Raw Materials Inventory 80,000

D) Manufacturing Overhead 80,000

Raw Materials Inventory 80,000

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  1. 2 August, 23:18
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    C) Work-in-Process Inventory 70,000

    Manufacturing Overhead 10,000

    Raw Materials Inventory 80,000

    Explanation:

    The direct materials are issued to work in process whereas the indirect material are accounted for in the manufacturing overheads. The raw materials inventory is credited as material is issued. The work in process and manufacturing overheads are debited as they receive materials.

    All the indirect expenses are charged to factory overhead.
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