Exercise 3-1 Prepare Journal Entries [LO3-1] Larned Corporation recorded the following transactions for the just completed month. $75,000 in raw materials were purchased on account. $73,000 in raw materials were used in production. Of this amount, $59,000 was for direct materials and the remainder was for indirect materials. Total labor wages of $116,000 were paid in cash. Of this amount, $102,000 was for direct labor and the remainder was for indirect labor. Depreciation of $194,000 was incurred on factory equipment.

Journal 1

Debit : Raw Materials $75,000

Credit : Accounts Payable $75,000

Journal 2

Debit : Work In Process - Direct Materials  $59,000

Debit : Work In Process - Indirect Materials $14,000

Credit : Raw Materials $73,000

Journal 3

Debit : Work In Process - Direct Labor $102,000

Debit : Work In Process - Indirect Labor $14,000

Credit : Cash $116,000

Journal 4

Debit : Work in Process - Depreciation expense $194,000

Credit : Accumulated Depreciation $194,000

Explanation:

All costs incurred during production are recorded on the debit of the work in process account as shown above.

disadvantages of leasing a vehicle: no vehicle equity and mileage limitations

disadvantages of purchasing a vehicle: large down payment and vehicle depreciation

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