Cline Manufacturing Company uses a job order system and maintains perpetual inventory records. The columns indicating the approp

Question

2 months ago

15

Cline Manufacturing Company uses a job order system and maintains perpetual inventory records. The columns indicating the approp

riate account(s) to be debited and credited for the transactions listed below. Fill the missing columns.
Transactions
1 Raw materials were purchased on account. Raw Materials Inventory Accounts Payable
2 Issued a check to Dixon Machine Shop for repair work on factory equipment. Accumulated Depreciation Accounts Payable
3 Direct materials were requisitioned for Job 280. Work in Process Inventory Raw Materials Inventory
4 Factory labor was paid as incurred. Factory Labor Factory Wages Payable
5 Recognized direct labor and indirect labor used.
6 The production department requisitioned indirect materials for use in the factory.
7 Overhead was applied to production based on a predetermined overhead rate of $8 per labor hour. Manufacturing overhead Accounts payable
8 Goods that were completed were transferred to finished goods.
9 Goods costing $80,000 were sold for $105,000 on account. Accounts Receivable Sales Revenue
10 Paid for raw materials purchased previously on account. Cost of Goods Sold Finished Goods Inventory

Business

1 answer:

marusya05 [3.7K] · Answer 1 · 2026-04-09T04:47:19+03:00

Answer:

5. Recognized direct and indirect labor utilized.

Debit Work in Process Inventory and Manufacturing Overhead.

Credit Factory Labor

Direct labor is debited to Work in Process Inventory to demonstrate its direct contribution. Both are credited to the Factory Labor account.

6. The production department requested indirect materials for factory use.

Debit Manufacturing Overhead

Credit Raw Materials Inventory.

Since these materials are indirect, they fall within Manufacturing Overheads.

These were taken from the Raw Materials account, necessitating a credit.

8. Completed products were shifted to finished goods.

Debit Finished Goods Inventory

Credit Work in Process Inventory

Both accounts being asset accounts means when reducing one account, you credit it, and when increasing another, you debit it. Goods were moved from the Work in Process account, so it was credited.

10. Payment was made for previously purchased raw materials on account. (The response for this transaction is for the prior question).

Debit Accounts Payable

Credit Cash.

These raw materials were acquired on credit, making them a liability. Once they are paid, Accounts Payable must be reduced through a debit. Cash is credited since it represents an asset decreasing.