Question

Please show your calculations so I can understand how you arrived at the solutions. I have solved everything but the journal entry numbers for 2-9 and 2-11. I need to know what numbers are used to complete the solution for these two journal entries. Instructions for number 9 and 11: Number 9 states “Record the transfer of completed products from production to finished goods inventory.” Number 11 states: “Record cost of goods sold for May.”

Sierra Company manufactures woven blankets and accounts for product costs using process costing. Data below are for one of its processing departments. The following information is available regarding its May inventories.

	Beginning Inventory			Ending Inventory
Raw materials inventory	$	60,000		$	92,500
Work in process inventory		435,000			515,000
Finished goods inventory		633,000			605,000

The following additional information describes the company's production activities for May.

Raw materials purchases (on credit)	$	250,000
Factory wages cost (paid in cash)		1,530,000
Other overhead cost (Other Accounts credited)		87,000
Materials used
Direct	$	157,500
Indirect		60,000
Labor used
Direct	$	780,000
Indirect		750,000
Overhead rate as a percent of direct labor		115	%
Sales (on credit)	$	2,500,000

rev: 09_05_2017_QC_CS-97362

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 wages, (g) other overhead costs, (h) overhead applied, (i) goods transferred from production to finished goods, and (j) sale of finished goods.

No	Date	General Journal	Debit	Credit
9	May 31	Finished goods inventory
		Work in process inventory
10	May 31	Accounts receivable	2,500,000
		Sales		2,500,000
11	May 31	Cost of goods sold
		Finished goods inventory

Answer 1

No	Date	General Journal	Debit	Credit
9	May-31	Finished goods inventory	18,02,000.00
		Work in process inventory		18,02,000.00
10	May-31	Accounts receivable	25,00,000.00
		Sales		25,00,000.00
11	May-31	Cost of goods sold	18,30,000.00
		Finished goods inventory		18,30,000.00

Workings

Cost sheet
Raw materials inventory		$       60,000.00
Direct Material	$ 1,57,500.00
Direct Labor Used	$ 7,80,000.00
Overhead 780000*115%	$ 8,97,000.00
Manufacturing Cost		$ 18,34,500.00
Less Raw materials inventory		$       92,500.00
Cost of finished goods		$ 18,02,000.00
Add Beginning Finished Goods		$    6,33,000.00
Less Ending Finished Goods		$    6,05,000.00
Cost of goods sold		$ 18,30,000.00