Answer: **Journal Entries:**
a. Materials Purchased on Account
| Account Name | Debit | Credit |
| ------------------------- | -------- | -------- |
| Raw Materials Inventory | $140,000 | |
| Accounts Payable | | $140,000 |
| *To record purchase of materials on account* | | |
b. Materials Requisitioned
| Account Name | Debit | Credit |
| ------------------------- | -------- | -------- |
| Work in Process Inventory | $85,000 | |
| Manufacturing Overhead | $15,000 | |
| Raw Materials Inventory | | $100,000 |
| *To record materials requisitioned* | | |
c. Payroll
First, calculate net payroll:
* Income tax deduction: $180,000 * 12% = $21,600
* Pension contribution: $180,000 * 7% = $12,600
* Net payroll: $180,000 - $21,600 - $12,600 = $145,800
Journal entry:
| Account Name | Debit | Credit |
| ------------------------- | -------- | -------- |
| Salaries and Wages Expense | $180,000 | |
| Income Tax Payable | | $21,600 |
| Pension Expense | | $12,600 |
| Cash | | $145,800 |
| *To record payroll* | | |
d. Payroll Distribution
| Account Name | Debit | Credit |
| ------------------------- | -------- | -------- |
| Work in Process Inventory | $108,000 | |
| Manufacturing Overhead | $27,000 | |
| Marketing Expense | $32,400 | |
| Administrative Expense | $12,600 | |
| Salaries and Wages Expense | | $180,000 |
| *To allocate payroll costs* | | |
(Calculations: Direct labor: $180,000 * 60% = $108,000; Indirect labor: $180,000 * 15% = $27,000;
Marketing: $180,000 * 18% = $32,400; Administrative: $180,000 * 7% = $12,600)
e. Other Factory Overhead
| Account Name | Debit | Credit |
| ------------------------- | -------- | -------- |
| Manufacturing Overhead | $36,040 | |
| Accumulated Depreciation | | $8,500 |
| Cash | | $18,200 |
| Accounts Payable | | $17,840 |
| *To record other factory overhead* | | |
(Calculations: Depreciation: $8,500; Insurance: $1,200; Other overhead: $26,340; Cash payment:
$26,340 * 70% = $18,438; Accounts payable: $26,340 - $18,438 = $7,902)
f. Transfer of Factory Overhead
| Account Name | Debit | Credit |
| ------------------------- | -------- | -------- |
| Work in Process Inventory | $36,040 | |
| Manufacturing Overhead | | $36,040 |
| *To transfer factory overhead to work in process* | | |
g. Work Completed and Transferred
| Account Name | Debit | Credit |
| ------------------------- | -------- | -------- |
| Finished Goods Inventory | $120,000 | |
| Work in Process Inventory | | $120,000 |
| *To record completion of work* | | |
h. Sales
| Account Name | Debit | Credit |
| ------------------------- | -------- | -------- |
| Cash | $40,000 | |
| Accounts Receivable | $60,000 | |
| Sales Revenue | | $100,000 |
| Cost of Goods Sold | $75,000 | |
| Finished Goods Inventory | | $75,000 |
| *To record sales and cost of goods sold* | | |
There may be some minor discrepancies due to rounding. Always double-check calculations..