 it's going down out of raw materials into the working process copying this account putting it underneath right clicking pasting one two and three and then we're going to post this out so we're going to post this out to the working process and therefore working process being the fourth account down on the trial balance is going to be the fourth account down when we post it to the general journal so or the general ledger so i'm over here in s nine s nine equals the two fourteen five and enter we're gonna take it out of the other asset raw materials which is down here that's in the credit side so i'm in p 24 p 24 equals the two fourteen five once we hit enter this 368 will go down to 153 which is of course represented here as well as is the working process reflected by the working process in the general ledger so let's see what else we got next one we've got the indirect materials 60 support accounting instruction by clicking the link below giving you a free month membership to all of the content on our website broken out by category further broken out by course each course then organized in a logical reasonable fashion making it much more easy to find what you need than can be done on a youtube page we also include added resources such as excel practice problems pdf files and more like quickbooks backup files when applicable so once again click the link below for a free month membership to our website and all the content on it 8000 indirect materials so same kind of idea here except that we cannot the reason they're indirect is we can't really apply them to a specific process so anytime something says indirect that's like well we don't know exactly what to put it even though it's going to be part of inventory and that's an indication that it's going to be dumped into the dumping ground of factory overhead some part of inventory some piece of inventory that we will have to allocate at a later time so i'm going to copy factory overhead it's going to go up so we're going to paste that down here it's an asset has a debit balance we're going to make it go up by doing the same thing to it which is another debit and that's going to be factory over that's going to be indirect materials we're 68000 so we're going to credit something and we're going to do that we're going to take in this problem we're going to take it from the same area meaning raw materials so we're assuming that the raw materials here includes both of our direct materials and our indirect materials some problem will break the two out and today we have a raw materials direct raw materials indirect we're going to take them both out of the raw materials account in this case so i'm going to copy this it's going to go down out of the raw materials pasting one two three and then we're going to post this out again so factory overhead is down here third to last before we get to the orange accounts so we're looking for factory overhead so here it is down here we're debiting it again so we're in here in s29 equals and we're going to point to this 68000 and enter then we're looking for the raw materials raw materials over here on p25 p25 equals we're pointing to this 68000 and that's going to bring the raw materials down right there to the 85 five see what else we got over here we got the direct materials used direct materials you uh is that what uh indirect materials a direct labor used i'm sorry direct labor used okay so now that's basically going to be payroll here we've got payroll and once again we run into this thing we're probably having our head that if we're talking about payroll we should be debiting wages expense payroll expense some kind of expense but in this case we are paying payroll just like we always do but we're not paying payroll in order to generate revenue in the same time period we're paying these people in order to generate the asset and so under the matching principle we can't put it into the uh expense at this time it hasn't helped us generate revenue helped us generate an asset of inventory therefore we're going to put it into some kind of inventory asset if it's direct that means we know what process to put it to and we're going to put it into then the work in the work in process account the whip account so we're going to debit work in process instead of wages expense pasting one two three here so we've got to kind of unlearn that if you just kind of think of wages that's always going to go to wages expense it goes to wages expense because of the fact that it's there to generate revenue in this case that's not the case it's building the assets so that's going to be the 780 thousand we're going to credit something 780 i'm going to put a negative of that 780 to represent the credit and uh in in this case we're going to we're going to put it into some type of payable account just to represent uh the fact that it is a payable so if it was a payroll and we paid cash we could credit cash obviously we're not dealing with the payroll taxes at this point either we're just kind of simplifying so that we can see the inventory part of the problem so we are going to put it into here it is factory payroll payable so we're going to put it into a payable account and then we're going to pay it out at a later time meaning we're going to pay cash so this is similar to the to the payroll entry we debit payroll expense and we credit cash you can think of the most simplified payroll entry in this case we're debiting not payroll expense we're debiting the assets of inventory and we're crediting the payable liability which we will then pay at a later time so we're going to copy the liability and put that down here like so and now we're going to post this out to the general ledger so once again the working process is up here it's like the fourth account so here's the working process on uh s uh s 10 and i'm going to say the s 10 equals and we're going to point down here to the 780 c 24 enter and there we have that then we have the payable account there so here's the payable account it's going to be the second orange account so we're going to the second orange account here and we are in the credit side we're in k 29 i'm going to hold down control and make this a bit smaller so we can see everything like this and i'm trying to get to that that this number right there the credit so i'm in x 29 equals and we're going to point to that 780 right there and enter and so now we have the 780 in our running balance we have the 780 on the trial balance we have the working process here matching our working process there if we make it full screens we can see it there it is there all right so next item now it looks like we're done here because we're out of blue space but there are more blue spaces because it goes abc di and that doesn't work so we're going to have to unhide these i'm going to put my cursor on d hold down the left click drag over to j and then right click and unhide so now we can see these other cells here and then i'm going to go ahead and hide these cells on this side so that we can work with our problem and as compact as space as possible so i'm going to put my cursor on b hold down the left click and highlight over to e b to e let go right click on the highlighted area and hide all right so next item here we have the indirect labor used so same thing we're processing payroll and what we're going to have in our head every time we process payroll someone's probably you're probably thinking we're going to debit some kind of payroll expense and credit cash and that would be similar except for this case it's not a payroll expense because we're using this indirect labor to help make the asset so once again we're not expensing it we're going to put it into the asset of inventory rather than the expense and we don't know what job to put it in because that's indicated every time you hear indirect that means we're working on inventory but we don't know where exactly to put it in terms of what the process therefore we're going to dump it into the bucket of the factory overhead so i'm going to copy factory overhead going to put it in f6 right click paste 123790 it's actually higher than the direct labor which is kind of unusual and then we're going to credit the 790 as well and what will the credit go to same thing we did last time we're not going to credit cash in this time we're going to make them the most simplified payroll entry uh no payroll taxes or anything and we're going to credit the factory payroll payable a liability which we will then pay at a later time so we're going to copy the factory payroll payable and paste it 123 that's going to be the credit the liability is going up so now we have the factory overhead third to last before the orange accounts in the assets on the trial balance it's going to be the same on the general journal general ledger i should say because that would be the correct thing to say rather than what i did say okay so then we're going to be down here in s 30 so once again i'm going to hold down control and scroll down and so when we might be able to see him at the same time so i'm down here in s 30 we're going to say equals and point to that 790 up top and enter so there we have that posted i'm going to make it larger and then we're posting the payroll payable which is the first orange account so if we scroll over here the general journal general ledger and we look at the orange accounts in x 30 i'm going to say that equals hold down control well i'm going to do that this way hold down control so that we can see it all in one item and we're way down here in x 30 and then say equals and i'm pointing to that 790 now you might be saying i could just type these in there and you could but if you do it with journal and trace it's so much easier to go back when if there's an error and you know some people off some people make errors and then and that means that you got to go to everybody makes errors sometimes so this will make it a lot easier to see where things lie if you did not have that you couldn't use this function like this or you couldn't double click and see uh where the things are going where they're coming from so formulas better if you can use them all right next items i'm going to go up here i'm going to take these off and we've got 120 overhead rate as percent of direct labor so now we're going to use an overhead rate in order to allocate the overhead amounts and we're going to use 120 percent so remember that overhead rate is a predetermined rate that we're going to use we're using it based on direct labor because direct labor is generally a good approximation of of the amount of of work that's in a particular process and therefore we're going to use that amount in order to allocate out the stuff that we dumped into this overhead bucket which we now want to allocate out to the work in process so basically we're taking it out of here we're putting it into work in process in essence so we're going to debit work in process i'm going to copy work in process going to paste it one two three here and the amount is going to be for the direct labor which equaled the direct labor this 780 thousand times 120 if i move the decimal two places over it's 1.2 so 1.2 and there we have that we're going to credit for the same amount remember that this doesn't have anything to do with the labor in particular we're not paying payroll here we're using labor to know how much to allocate or estimate how much to allocate out okay so we have that and it's going to be going into work in process and out of factory overhead so i'm going to copy factory overhead so that's going to be the credit going to paste it one two three then we're going to go ahead and post this to the general journal general ledger so the fourth account is work in process that's the first one we're going to look for work in process right there it's in s 11 so in s 11 right there we're going to say that equals point to that 936 and enter work in process goes up to 2 million 349 five then we're going to credit factory overhead which is way down here two accounts downs we're going to go down to factory overhead here's our credit we've been debiting all this stuff in there including uh any any raw materials any indra i mean i'm sorry any indirect materials indirect labor all that stuff we didn't know where to put it to we put it in there now we're going to say i'm going to hold down control and scroll down now we're going to take it out of here and i'm in cell t 31 equals and point to that 936 there and enter and that takes it down to zero and that of course out that worked very perfectly right there and so it may not always be uh exact so i'm going to scroll back up