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just olya
2 months ago
13

The gross earnings of the factory workers for Vargas Company during the month of January are $66,000. The employer’s payroll tax

es for the factory payroll are $8,000. The fringe benefits to be paid by the employer on this payroll are $6,000. Of the total accumulated cost of factory labor, 85% is related to direct labor and 15% is attributable to indirect labor.(a) Prepare the entry to record the factory labor costs for the month of January.(b) Prepare the entry to assign factory labor to production.
Business
1 answer:
Katen [3.5K]2 months ago
6 0

Answer:

(a) The losses and expenses are debited while all increased liabilities are credited.

Factory Labor a/c        Dr.                      $80,000

 To Factory wages payable                                     $66,000

 To Employer payroll tax payable                            $8,000

 To Employer fringe benefits payable                     $6,000

(recording of factory labor costs)

(b) All increased assets along with expenses and losses are debited and the increase in liability is credited.

Work in process Inventory a/c (85% of $80,000) Dr. $68,000

Manufacturing account a/c (15% of $80,000)       Dr. $12,000

To Factory Labor                                                                $80,000  

(recording of factory labor to production)  

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