Chapter 2

Question 0

On April 1, Ruger Corporation had $7,000 in raw materials on hand. During the month, the company purchased on account an additional $60,000 in raw materials. The purchase is recorded in journal entry as: (Debit/Credit)

Answer 0

Debit: Raw Materials ($60,000)
Credit: Accounts payable ($60,000)

Question 1

During April, $52,000 in raw materials were requisitioned from the storeroom for use in production. These raw materials included $50,000 of direct and $2,000 of indirect materials. This is recorded in journal entry as: (Debit/Credit)

Answer 1

Debit: Work in Process ($50,000)
Debit: Manufacturing Overhead ($2,000)
Credit: Raw Materials ($52,000)

Question 2

In April, the employee time tickets included $60,000 recorded for direct labor and $15,000 for indirect labor. This is recorded as a journal entry as: (Debit/Credit)

Answer 2

Debit: Work in Process ($60,000)
Debit: Manufacturing Overhead ($15,000)
Credit: Salaries and Wages Payable ($75,000)

Question 3

Utilities: $21,000
Rent on factory equipment: $16,000
Miscellaneous factory overhead costs: $3,000
Total: $40,000
The journal entry is recorded as: (Debit/Credit)

Answer 3

Debit: Manufacturing Overhead ($40,000)
Credit: Accounts Payable ($40,000)

Question 4

Assume that during April, Ruger Corporation recognized $13,000 in accrued property taxes and that $7,000 in prepaid insurance expired on factory buildings and equipment. The journal entry is recorded as: (Debit/Credit)

Answer 4

Debit: Manufacturing Overhead ($20,000)
Credit: Property Taxes Payable ($13,000)
Credit: Prepaid Insurance ($7,000)

Question 5

Assume that the company recognized $18,000 in depreciation on factory equipment during April. The journal entry is recorded as: (Debit/Credit)

Answer 5

Debit: Manufacturing Overhead ($18,000)
Credit: Accumulated Depreciation ($18,000)

Question 6

Assume that Ruger Corporation’s predetermined overhead rate is $6 per machine-hour. Also assume that during April, 10,000 machine-hours were worked on Job A and 5,000 machine-hours were worked on Job B. Thus, $90,000 in overhead cost would be applied to Work in Process. The journal entry is recorded as: (Debit/Credit)

Answer 6

Debit: Work in Process ($90,000)
Credit: Manufacturing Overhead ($90,000)

Question 7

Assume that Ruger Corporation incurred $30,000 in selling and administrative salary costs during April. The journal entry is recorded as: (Debit/Credit)

Answer 7

Debit: Salaries Expense ($30,000)
Credit: Salaries and Wages Payable ($30,000)

Question 8

Assume that depreciation on office equipment during April was $7,000. The journal entry is recorded as: (Debit/Credit)

Answer 8

Debit: Depreciation Expense ($7,000)
Credit: Accumulated Depreciation ($7,000)

Question 9

Assume that advertising was $42,000 and that other selling and administrative expenses in April totaled $8,000. The journal entry is recorded as: (Debit/Credit)

Answer 9

Debit: Advertising Expense ($42,000)
Debit: Other Selling and Administrative Expense ($8,000)
Credit: Accounts Payable ($50,000)

Question 10

Assume that Job A ($158,000) was completed during April. The journal entry is recorded as: (Debit/Credit)

Answer 10

Debit: Finished Goods ($158,000)
Credit: Work in Process ($158,000)

Question 11

Assume 750 of the 1,000 gold medallions in Job A were shipped to customers by the end of the month for total sales revenue of $225,000. The unit product cost was $158. The journal entries are recorded as: (Debit/Credit)

Answer 11

Debit: Accounts Receivable ($225,000)
Credit: Sales ($225,000)

Debit: COGS ($118,500)
Credit: Finished Goods ($118,500)