Question

Prepare journal entries to record the following production activities.

1. Purchased \(80,000 of raw materials on credit.

2. Used \)42,000 of direct materials in production.

3. Used $22,500 of indirect materials in production.

Short answer

Both sides of the journal totals$144,500.

Step-by-step solution

Definition of Direct Material

Direct material can be defined as the material used in the production process that can be identified directly by physical inspection of the product. Such as glass can be directly identified by physical inspection of the screen.

Journal entries for production activities

Date	Accounts and Explanation	Debit ($)	Credit ($)
1	Raw material inventory	80,000
	Account payable		80,000
2	Work-in-process inventory	42,000
	Raw material inventory		42,000
3	Factory overhead	22,500
	Raw material inventory		22,500
		$144,500	$144,500