Question

The Tollowing Information applies to the questions displayed below. Sierra Company manufactures woven blankets and accounts for product costs using process costing. The company uses a single processing department. The following information is available regarding its May inventories Raw materials inventory Work in process inventory Finished goods inventory Beginning Ending Inventory Inventory $ 55,000 $ 68,500 439,000 613,000 605,000 564,000 The following additional information describes the company's production activities for May. $ 280,000 1,582,000 5,000 $ Raw materials purchases (on credit) Factory wages cost (paid in cash) Other overhead cost (Other Accounts credited) Materials used Direct Indirect Labor used Direct Indirect Overhead rate as a percent of direct labor Sales (on credit) 194,500 72,000 $ 790,000 792,000 110% $4,500,000 The predetermined overhead rate was computed at the beginning of the year as 110% of direct labor cost. 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, (h) overhead applied, (i) goods transferred from production to finished goods, and (i) sale of finished goods. View transaction list Journal entry worksheet 2 3 4 5 6 7 8 ...... 11 Record purchase of raw materials. Note: Enter debits before credits. General Journal Debit Credit Date May 31

Answer 1

	Journal Entries
	Date	General Journal				Debit	Credit
	1)	Raw materials inventory				280,000
		Accounts payable					280,000
	2)	Work in process inventory				194,500
		Raw materials inventory					194,500
	3)	Facotry overhead				72,000
		Raw materials inventory					72,000
	4)	Work in process inventory				790,000
		Factory wages payable					790,000
	5)	Facotry overhead				792,000
		Factory wages payable					792,000
	6)	Factory wages payable				1,582,000
		cash					1,582,000
	7)	Factory overhead				5,000
		other accounts					5,000
	8)	Work in process inventory				869000
		factory overhead					869000
	9)	Finished goods inventory				1,679,500
		Work in process inventory					1,679,500
	10)	Accounts receivable				4,500,000
		sales					4,500,000
	11)	Cost of goods sold				1,720,500
		finished goods invnetory					1,720,500