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15 July, 12:46

Squirrel Co. operates in a lean manufacturing environment. For June production, Squirrel purchased 6,000 units of raw materials at $6.00 per unit on account. The journal entry required to record this transaction is:

a. Raw Materials Inventory36,000

Accounts Payable36,000

b. Raw and In Process Inventory36,000

Accounts Payable36,000

c. Finished Goods36,000

Accounts Payable36,000

d. Cost of Goods Manufactured36,000

Accounts Payable36,000

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  1. 15 July, 13:03
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    At the time of purchase of raw material inventory,

    Raw material inventory account will debit and accounts payable account will credit.

    Therefore, the Journal entry for this transaction is as follows:

    Raw Materials Inventory Account Dr. $36,000

    To Accounts Payable $36,000

    (To record the purchase of raw material on account)

    Workings:

    Raw material Inventory = Units of raw material purchased * Price per unit

    = 6,000 * $6

    = $36,000
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