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

Question

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

e. Recorded manufacturing overhead: depreciation on plant, \(18,000; plant insurance (previously paid), \)1,500; plant property tax, $3,900 (credit Property Tax Payable).

 

Step-by-Step Solution

Answer

Date	Particulars	Debit ($)	Credit ($)
	Manufacturing overhead	23,400
	Accumulated depreciation		18,000
	Prepaid plant insurance		1,500
	Property tax payable		3,900

Step-by-Step Solution: Step 1: Depreciation

Depreciation is defined as the reduction in the book value of the fixed assets of the company. It is recorded as an indirect expense in the income statement.

Step 2: Recording of manufacturing overhead in the books of the company

The manufacturing overhead are recorded as by debiting the manufacturing overhead account and by crediting the accumulated depreciation, prepaid plant insurance and the property tax payable account.