The following journal entry would be made to record the use of $6,100 of direct labor in aproduction department during the reporting period:
Question
The following journal entry would be made to record the use of $6,100 of direct labor in a production department during the reporting period:
Solution
The journal entry to record the use of $6,100 of direct labor in a production department during the reporting period would be:
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Debit Work in Process Inventory for $6,100: This increases the value of the goods that are partially completed. The work in process account is an asset account.
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Credit Wages Payable for $6,100: This recognizes the company's obligation to pay its employees for their labor. Wages payable is a liability account.
The journal entry would look like this:
Work in Process Inventory Debit 6,100
This entry reflects the cost of direct labor (i.e., the cost of employees who work directly on the goods being produced) being added to the work in process. The credit to wages payable shows that the company owes this money to its workers.
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