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Required information Problem 03-1A Production cost flow and measurement; journal entries LO P1, P2, P3, P4 (The following inf
Problem 03-1A Part 2 2. Prepare summary journal entries dated May 31 to record the following production activities during May
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Answer #1

Answer: JOURNAL ENTRIES

No. Date Account Title and Explanation Debit $ Credit $
1 May 31 Raw Material invetory 75,000
Account payable 75,000
(Being RM inventory purchased on credit)
2 May 31 Work-in-progress (WIP) - Cutting 24,250
Raw Material inventory 24,250
(Being raw material applied to cutting process)
3 May 31 Factory Overhead 39,600
Raw Material inventory 39,600
(Being indirect material applied to overhead)
4 May 31 Work-in-progress (WIP) - Cutting 20,600
Work-in-progress (WIP) - Stitching 82,400
Factory Payroll payable 103,000
(Being labor applied to production)
5 May 31 Factory Overhead 57,000
Factory Payroll payable 57,000
(Being factory payroll applied to overhead)
6 May 31 Factory Payaroll payable 160,000
Cash 160,000
(Being Factory payroll paid)
7 May 31 Factory overhead 57,000
Other accounts 57,000
(Being other overhead costs incurred )
8 May 31 Work-in-progress (WIP) -Cutting (24,250*150%) 36,375
Work-in-progress (WIP) -Stitching (82,400*120%) 98,800
Factory overhead 135,255
(Being overhead applied to production)
9 May 31 Work-in-progress (WIP) -Stitching 114,225
Work-in-progress (WIP) -Cutting (working 1) 114,225
(Being partially completed goods transferred)
10 May 31 Finished Goods Inventory 367,225
Work-in-progress (WIP) -Stitching (working 2) 367,225
(Being finished goods transferred)
11 May 31 Cost of goods sold 379,075
Finished Goods Inventory (working 3) 379,075
(Being COGS booked for sales)
12 May 31 Accounts Receivable 656,000
Sales revenue 656,000
(Being sales booked)

Workings:- Ledger Accounts

1.) WORK-IN-PROGRESS - CUTTING  

Opening bal 143,500 WIP -Stitching 114,225
Raw material 24,250
Direct labor 20,600
Factory overhead 36,375 Closing bal. 110,500

2.) WORK-IN-PROGRESS - STITCHING  

Opening bal 163,300 Finished goods inventory 367,225
WIP- Cutting 114,225
Direct labor 82,400
Factory overhead 98,800 Closing bal. 91,500

3.) FINISHED GOODS INVENTORY

Opening bal 40,100 Cost of goods sold 379,075
WIP- Stitching 367,225 Closing bal. 28,250

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