Andrew Industries purchased $165,000 of raw materials on account during the month of March.The beginning Raw Materials Inventory balance was $22,000,and the materials used to complete jobs during the month were $141,000 of direct materials and $13,000 of indirect materials.
-What journal entry should Andrew use to account for direct materials used in March:
A)Debit Raw Materials Inventory $141,000; credit Accounts Payable $141,000.
B)Debit Work in Process Inventory $141,000; credit Raw Materials Inventory $141,000.
C)Debit Work in Process Inventory $141,000; credit Accounts Payable $141,000.
D)Debit Finished Goods Inventory $22,000; credit Raw Materials Inventory $22,000.
E)Debit Raw Materials Inventory $153,000; credit Work in Process Inventory $153,000.

Question

Quizplus · Accepted Answer

The journal entry for direct materials used is to debit Work in Process Inventory for the cost of $141,000 and credit Raw Materials Inventory for the same amount. This reflects the transfer of the cost of raw materials from the Raw Materials Inventory to the Work in Process Inventory as the materials are used in production. While option A is correct for the initial purchase of raw materials on account, it does not reflect the use of the materials. Option C is incorrect because it would reflect the payment to the supplier, not the use of the materials. Option D is incorrect because it reflects a transfer to Finished Goods Inventory, which will occur only when the products are completed. Option E is incorrect because it reflects a transfer of raw materials to Work in Process Inventory and does not reflect the consumption of direct materials.

Andrew Industries Purchased $165,000 of Raw Materials on Account During