Answer:
1. Raw materials were purchased on account.
Debit Raw Materials Inventory.
Credit Accounts Payable.
Inventory was bought in credit so Payable is owed.
2. Issued a check to Dixon Machine Shop for repair work on factory equipment.
Debit Manufacturing Overhead
Credit Cash
Cash was used to pay for Indirect production work. Cash reduces Sonia credited.
3. Direct materials were requisitioned for Job 280.
Debit Work in Progress Inventory
Credit Raw Material Inventory
Transferred from Raw Materials so work may be done.
4. Factory labor was paid as incurred.
Debit Factory Labor
Credit Cash
Cash reduces again so is credited. Factory Labor is Expense that should be debited.
5. Recognized direct labor and indirect labor used.
Debit Work in Progress Inventory
Debit Manufacturing Overhead
Credit Factory Labor
Direct Labor falls under Work in Progress and Indirect Labor falls under Manufacturing Overhead.
6. The production department requisitioned indirect materials for use in the factory.
Debit Manufacturing Overhead
Credit Raw Materials Inventory
Indirect materials are an overhead.
7. Overhead was applied to production based on a predetermined overhead rate of $8 per labor hour.
Debit Work in Progress Inventory
Credit Manufacturing Overhead
8. Goods that were completed were transferred to finished goods.
Debit Finished Goods
Credit Work in Progress Inventory
9. Goods costing $80,000 were sold for $105,000 on account.
Debit Cost of Goods Sold
Credit Inventory
Then,
Debit Accounts Receivable
Credit Sales
10. Paid for raw materials purchased previously on account.
Debit Accounts Payable
Credit Cash
