Prepare journal entries to record the following production activities for Hotwax. 1. Incurred direct labor of $200,000 (credit Factory Payroll Payable). 2. Incurred indirect labor of $11,500 (credit Factory Payroll Payable). 3. Total factory payroll of $211,500 was paid in cash.

a. Debit Work-in- Progress with $200,000, and credit factory payroll payable with $200,000.

b. Debit factory overhead with $11,500, and credit factory payroll payable                                               with $11,500.

c. Debit factory payroll payable with $211,500, and credit Cash with $211,500.

Explanation:

This will appear as follows in the account:

                             Hotwax's Journal Entries

Details                                               Dr ($)                 Cr ($)          

Work-in- Progress                          200,000

Factory payroll payable                                            200,000

Being direct labor cost incurred                                                    

Factory overhead                               11,500

Factory payroll payable                                               11,500

Being the indirect labor cost incurred                                            

Factory payroll payable                      211,500

Cash                                                                               211,500

Being total factory payroll or labor cost paid in cash                  

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