Question: 1. A recent balance sheet for Porsche AG shows beginning raw materials inventory of €83 million and ending raw materials inventory of €85 million. Assume the company purchased raw materials (on account) for €3,108 million during the year.
(1) Prepare journal entries to record
a) the purchase of raw materials and
b) the use of raw materials in production.
(2) What do you notice about the € amounts in your journal entries?
2. What events cause debits to be recorded in the Factory Overhead account(FOA)? What events cause credits to be recorded in the Factory Overhead account?