Torre Corporation incurred the following transactions 1 Purc

Torre Corporation incurred the following transactions. 1. Purchased raw materials on account $45,680. 2. Raw Materials of $35,490 were requisitioned to the factory. An analysis of the materials requisition slips indicated that $7,040 was classified as indirect materials. 3. Factory labor costs incurred were $53,970, of which $48,790 pertained to factory wages payable and $5,180 pertained to employer payroll taxes payable. 4. Time tickets indicated that $47,020 was direct labor and $6,950 was indirect labor. 5. Manufacturing overhead costs incurred on account were $81,190. 6. Depreciation on the company’s office building was $7,680. 7. Manufacturing overhead was applied at the rate of 150% of direct labor cost. 8. Goods costing $88,950 were completed and transferred to finished goods. 9. Finished goods (a) costing $74,210 to manufacture were (b) sold on account for $102,750.

Solution

2. Work in progress Account 35490

Rawmaterial Inventory 35490

(Being Raw materials issued to Production)

. Manufacturing Overheads 7040

  Rawmaterial Inventory 7040

(being indirect materials recorded)

3. Work in Progress Account 53970

Wages Payable 48790

Taxes Payabe 5180

(Being Direct labour wages and taxes thereon)

4.Production Overhead Control Account 6950

Work in progress 6950

(Being Rectification for indirect labour)

5. Work in progress account 81190

Manufacturing Overheads 81190

(being manufacturing overheads)

6. Depreciation 7680

To Accumulated Depreciation-Building 7680

(Being depreciation on building)

7. Finished Goods 88950

To Work in progress Account 88950

(Being transfer to finished goods)

8. Cost of Goods Sold 102750

To Finished Goods 74210

To Profit 28540