On November 1, Arvelo Corporation Had $32,000 of Raw Materials

question 213

Multiple Choice

On November 1, Arvelo Corporation had $32,000 of raw materials on hand. During the month, the company purchased an additional $78,000 of raw materials. During November, $95,000 of raw materials were requisitioned from the storeroom for use in production. These raw materials included both direct and indirect materials. The indirect materials totaled $3,000. Prepare journal entries to record these events. Use those journal entries to answer the following questions:
-The credits to the Manufacturing Overhead account as a consequence of the raw materials transactions in November total:

• A) $0
• B) $3,000
• C) $92,000
• D) $95,000

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Definitions:

Stock Dividend

A distribution of additional shares of a company's stock to its shareholders, usually in lieu of cash dividends.

Cash Dividends

Direct payments of profit made to shareholders, proportionate to the number of shares they own.

Treasury Stock

Shares that were first put into circulation by a company and then taken back, diminishing the quantity of shares actively traded on the market.

Small Stock Dividend

A dividend paid in the form of additional shares of the issuing corporation, typically representing less than a 25% increase of the outstanding shares.