Which of the Following Pair of Journal Entries Correctly Records

question 57

Multiple Choice

Which of the following pair of journal entries correctly records the current month's activity where the company had $42,060 in total factory labor costs that were paid in cash with $32,400 of this total for direct labor?

• A)\(\begin{array}{llr}
• \text { Factory Payroll } &42,060\\
• \text { Cash } &&42,060\\
• \\
• \text { Wage Expense } &32,400\\
• \text { Factory Overhead } &9,660\\
• \text {Factory Payroll } &&42,060\\
• \end{array}\)
• B)\(\begin{array}{llr}
• \text { Factory Payroll } &42,060\\
• \text { Cash } &&42,060\\
• \\
• \text { Wage Expense } &32,400\\
• \text { Factory Overhead } &9,660\\
• \text {Factory Payroll } &&42,060\\
• \end{array}\).
• C)\(\begin{array}{llr}
• \text {Cash } &42,060\\
• \text { Factory Payroll } &&42,060\\
• \\
• \text { Goods in Process Inventory } &32,400\\

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Definitions:

Net Income

The total profit or loss of a company after all revenues, expenses, and taxes have been accounted for.

Owner's Equity

Owner's equity represents the owner's claim to the assets of a business, calculated as the business's total assets minus its total liabilities.

Salvage Value

is the estimated residual value of an asset at the end of its useful life.

Depreciation Expense

The allocated amount of an asset's cost expensed over its useful life to account for wear and tear, obsolescence, or decline in value.