Mesa Company produces wooden rocking chairs. The company has two production departments, Cutting and Assembly. The wood is cut and sanded in Cutting and then transferred to Assembly to be assembled and painted. From Assembly, the chairs are transferred to Finished Goods Inventory and then are sold. Mesa has compiled the following information for the month of February:

Cutting Department Assembly Department
Direct materials $150,000 $24,000
Direct labor 130,000 198,000
Applied manufacturing overhead 300,000 334,000
Cost of goods completed and transferred out 468,000 506,000

Required:
Prepare journal entries for the transactions in the Cutting and Assembly Departments of Mesa Company.

1.Record the transfer of materials to production in the Cutting department.
2. Record the cost of labor in the Cutting department.
3. Record the application of manufacturing overhead in the Cutting department.
4. Record the transfer of work in process inventory from Cutting to Assembly.
5. Record the transfer of materials to production in the Assembly department.
6. Record the cost of labor in the Assembly department.
7. Record the application of manufacturing overhead in the Assembly department.
8. Record the transfer of work in process inventory from Assembly to Finished Goods Inventory.

Answer and Explanation:

The journal entries are given below:-

1. Work-in-process - Cutting Dept. Dr, $150,000  

            To Raw material $150,000

(Being materials to production in the Cutting department is recorded)

2. Work-in-process - Cutting Dept. Dr, $130,000  

           To Wages expense $130,000

(Being cost of labor in the Cutting department is recorded)

3. Work-in-process - Cutting Dept. Dr, $300,000  

            To Manufacturing overhead $300,000

(Being manufacturing overhead in the Cutting department is recorded)

4. Work-in-process - Assembly Dept. Dr, $468,000  

            To Work-in-process - Cutting Dept. $468,000

(Being transfer of work in process inventory from Cutting to Assembly is recorded)

5. Work-in-process - Assembly Dept. Dr, $24,000  

           To Raw material $24,000

(Being materials to production in the Assembly department is recorded)

6. Work-in-process - Assembly Dept. Dr, $198,000

        To Wages expense $198,000

(Being cost of labor in the Assembly department is recorded)

7. Work-in-process - Assembly Dept. Dr, $334,000  

         To Manufacturing overhead $334,000

(Being manufacturing overhead in the Assembly department is recorded)

8. Finished goods Dr, $506,000  

        To Work-in-process -- Assembly Dept. $506,000

(Being transfer of work in process inventory from Assembly to Finished Goods Inventory is recorded)

is the answer

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