24E-b - Horngren'S Financial And Managerial Accounting

Question

Question: Journalize the following transactions for Marge’s Sofas. Explanations are not required.

b. Incurred manufacturing wages of $15,000, 75% of which was direct labor and

25% of which was indirect labor.

Step-by-Step Solution

Answer

Date	Particulars	Debit ($)	Credit ($)
	Work-in-process inventory (75% of $15,000)	11,250
	Manufacturing overhead (25% of $15,000)	3,750
	Wages payable		15,000

Step-by-Step Solution: Step 1: Wages payable

Wages payable is defined as the current liability of the company which shows the amount due to employees but not paid during the year.

Step 2: Recording of direct or indirect labor expenses in the books of the company

The labor wages incurred by the company is recorded in the books by debiting the direct labor cost as work in process, indirect labor cost as manufacturing overhead and crediting the wages payable account.