Question

Required information [The following information applies to the questions displayed below.] 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: Work in process inventory-Cutting Work in process inventory-Stitching Finished goods inventory Beginning Ending Inventory Inventory 43,500 51,500 63,300 60,500 20,100 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 0 Direct 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 costs $ 6,000 55,000 47,000 Factory Overhead Rates Cutting (150% of direct materials used) Stitching (120% of direct labor used) Sales $256,000 2. Prepare summary journal entries dated May 31 to record the following production activities during May: (a) raw materials purchases, (b) direct materials usage, (c) indirect materials usage, (d) direct labor costs incurred, (e) indirect labor costs incurred, (f) payment of factory payroll, (g) other overhead costs, (credit Other Accounts), (h) overhead applied, (1) goods transferred from Cutting to Stitching, (1) goods transferred from Stitching to finished goods, (k) cost of goods sold, and (1) sales.

Answer 1

Credit $ Preparation of Journal Entries: No Date Account Titles & Explanantion 1 May-31 Raw Material Inventory Accounts Payable Debit $ 25,000 $ $ 25,000 2 $ 21,750 May-31 WIP-Cutting Raw Material Inventory $ 21,750 3 $ May-31 Factory Overhead Raw Material Inventory 6,000 $ 6,000 4 May-31 WIP-Cutting WIP-Stitching Wages Payable $ $ 15,600 62,400 $ 78,000 5 $ 55,000 May-31 Factory overhead Wages Payable $ 55,000 6 $ May-31 Wages Payable Cash 1,33,000 $ 1,33,000 7 $ 47,000 May-31 Factory overhead Other accounts (other overhead costs incurred) $ 47,000 8 May-31 WIP-Cutting (21750*150%) WIP-Stitching (62400*120%) Factory overhead (being overhead applied to production) $ $ 32,625 74,880 $ 1,07,505 9 61,975 May-31 WIP-Stitching $ WIP-Cutting (being partially completed goods transferred) $ 61,975 10 $ 2,02,055 May-31 FG Inventory WIP-Stitching (finished goods transferred) $ 2,02,055 11 May-31 COGS FG Inventory $ 2,13,905 $ 2,13,905 12 May-31 Accounts Receivable Sales revenue $ 2,56,000 $ 2,56,000 Workings ob RM DL $ $ 61,975 51,500 $ $ $ $ $ WIP Cutting 43,500 WIP-Stitching 21,750 cb 15,600 32,625 1,13,475 Total FO Total $ 1,13,475 ob WIP-Cutting DL FO Total $ 2,02,055 $ 60,500 WIP Stitching 63,300 FG Inventory 61,975 cb 62,400 74,880 2,62,555 Total $ $ $ $ $ $ 2,62,555 ob WIP Stitching Total Finished Goods Inventory $ 20,100 COGS $ 2,02,055 cb $ 2,22,155 Total $ 2,13,905 $ 8,250 $ 2,22,155 Kindly Comment down for any clarifications/ queries and please upvote.