Question

Clancy 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 Ending Inventory $140,950 62,500 170,50e0 52,250 Beginning Inventory $116,00e Raw materials inventory Work in process inventory-Cutting Work in process inventory-Stitching Finished goods inventory 263,500 283,300 240,100 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 $135,000 27,250 Direct labor Direct labor-Cutting oirect labor-stitching Total factory payroll paid (in cash) $ 26,600 106,400 192,400 Factory Overhead (Actual costs) Indirect naterials used Indirect labor used Other overhead costs s 82,800 59,400 69.e00

Answer 1

Requirement a: Prepare journal entry for the purchase on raw material on credit as shown below: Credit $ Date 31-May | Debit $ $135,000 Account Title Raw Material Inventory Accounts Payable (To record the purchase of raw material on credit) $135,000 Requirement b: Prepare journal entry to record the direct materials used in production as shown below: Credit $ Debit $ $27,250 Date Account Title 31-May Work in Process inventory - Cutting Raw material Inventory (To record the direct materials used in production) $27,250 Requirement c: Prepare journal entry to record the usage of indirect materials as shown below: Credit $ Date 31-May Debit $ $82,800 Account Title Factory Overhead Raw material Inventory ventory (To record the usage of indirect material) $82,800 Requirement d: Credit $ Date 31-May Account Title Work in Process - Cutting Work in Process - Stitching Payroll Payable (To record the labor applied to production) Debit $ 26,600 106,400 | 133,000

Requirement e: Credit $ Date 31-May Account Title Factory Overhead Payroll Payable Debit $ 59,400 59,400 (To record the factory payroll applied overhead) Requirement f: Account Title Credit $ Date 31-May Debit $ 192,400 Payroll Payable Cash 192,400 (To record the payroll paid) Requirement g: Credit $ Date 31-May Account Title Factory Overhead Other Accounts Debit $ 69,000 69,000 (To record the other overhead costs incurred) Requirement h: Credit $ Date 31-May Account Title Work in Process - Cutting ($27,250 x150%) Work in Process - Stitching ($106,400 x120%) Factory Overhead (To record the overhead applied to production) Debit $ 40.875 127,680 168,555

Requirement i: Credit $ Date 31-May Account Title Work in Process - Stitching* Work in Process - Cutting Debit $ 295,725 295,725 (To record the partially completed goods transferred) Working: 295,725 $62,500 Beginning RM DL FO Total WIP Cutting $263,500 | WIP-Stitching (balance amount) * 27,250 Ending balance 26,600 40,875 358,225 Total 358.225

Requirement j: Credit $ Date | 31-May Account Title Finished Goods Inventory** Work in Process - Stitching Debit $ 642,605 642,605 (To record the transfer of finished goods) WIP Stitching FG Inventory (balance amount) ** $283,300 642,605 $170,500 Beginning WIP cutting DL FO Total 295,725 Ending balance 106,400 127,680 803,105 Total 803,105

Requirement k: Credit $ Date 31-May Account Title Cost of Goods sold*** Finished goods Inventory Debit $ 830,455 830,455 (To record the cost of goods sold ) Working: Finished Goods Inventory $240,100 COGS (balance amount) *** $830,455 Beginning WIP Stitching 642,605 Ending balance $52.250 Total $882,705 Total 4882,705 Requirement 1: Credit $ Date | 31-May Account Title Accounts Receivable Sales Revenue Debit $ 1,136.000 1,136,000 (To record the sales of goods on account)