QS 195 Labor journal entries LO P2 During the current month

QS 19-5 Labor journal entries LO P2 During the current month, a company that uses job order costing incurred a monthly factory payroll of $194,500. Of this amount, $59,000 is classified as indirect labor and the remainder as direct. Prepare journal entries to record these transactions. View transaction list Journal entry worksheet Record the cost of direct labor used. Note: Enter debits before credits. Transaction General Journal Debit Credit

Solution

1: journal entry for direct labor cost:

= Work in progress a/c . Dr. 135500

To factory payroll a/c . Cr. 135500

(Being direct labor recorded)

2. For indirect labor cost

= Manufacturing overhead. a/c. Dr. $59000

To factory payroll . a/c . Cr. $59000

(Being indirect labor recorded)

Work in progress a/c . Dr. $59000

To manufacturing overhead . a/c . Cr. $59000

(Being overhead applied to production)