Question

GL1601 - Based on Problem 16-1A Sierra Company LO P1, P2, P3, P4 Sierra Company manufactures soccer balls in two sequential processes: Cutting and Stitching. All direct materials enter production at the beginning of the Cutting process. The following information is available regarding its May inventories: Rav materials inventory Work in process inventory-Cutting Work in process inventory-Stitching Finished goods inventory Beginning Inventory $ 6,000 43,500 63,300 20,100 Ending Inventory $3,250 51.500 60.500 8,250 The following additional information describes the company's production activities for May. Direct materials Raw materials purchased on credit Direct materials used-Cutting Direct materials used-stitching $ 25,000 21,750 Direet labor Direct labor-Cutting Direct labor-Stitching Total factory payroll paid (in cash) $ 15,600 62,400 133,000 Factory Overhead (Actual costs) Indirect materials used Indirect labor used Other overhead cost $ 6,000 55,000 47.000 Factory Overhead Rates Cutting (1501 of direct materials used) Stitehing (1201 of direct labor used) Sales $256.000

Answer 1

Journal Entry
Date	Account Title	Debit	Credit
May. 31	Raw Material Inventory A/c Dr.	25000
	To Accounts Payable		25000
Raw Material Inventory
Beginning Raw Material Inventory		6000
Add: Purchase		25000
Material Available for use		31000
Less: Direct Material Used-Cutting		-21750
Less: Direct Material Used-Stiching		0
Ending Raw Material Inventory		9250
Cost of Goods Manufacturing Cutting
Raw Material Consumed		21750
Direct Labour		15600
Factory Overhead		32625
Total Manufacturing Cost Added			69975
Opening WIP			43500
Total cost of Work in Progress			113475
Less: Closing WIP			-51500
Cost of Goods Manufactured			61975
Cost of Goods Manufacturing Stiching
Raw Material Consumed		0
Direct Labour		62400
Factory Overhead		74880
Total Manufacturing Cost Added			137280
Opening WIP			63300
Total cost of Work in Progress			200580
Less: Closing WIP			-60500
Cost of Goods Manufactured			140080
Cost of Goods Sold
Opening Finished Goods		61975
Cost of Goods Manufacturing Stiching		140080
Cost of Goods available for sales		202055
Opening Finished Goods		20100
Less: Closing Stock of Finished Goods		-8250
Cost of Goods Sold		213905
Gross Profit
Sales		256000
Less: Cost of Goods Sold		-213905
Gross Profit		42095