Question

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: Beginning Inventory Ending Inventory Work in process inventory—Cutting 83,500 80,500 Work in process inventory—Stitching 103,300 72,900 Finished goods inventory 28,100 16,250 The following additional information describes the company's production activities for May. Direct materials Raw materials purchased on credit $ 45,000 Direct materials used—Cutting 22,750 Direct materials used—Stitching 0 Direct labor Direct labor—Cutting $ 17,600 Direct labor—Stitching 70,400 Total factory payroll paid (in cash) 143,800 Factory Overhead (Actual costs) Indirect materials used $ 18,000 Indirect labor used 55,800 Other overhead costs 51,000 Factory Overhead Rates Cutting (150% of direct materials used ) Stitching (120% of direct labor used ) Sales $416,000 rev: 01_28_2020_QC_CS-197408 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, (i) goods transferred from Cutting to Stitching, (j) goods transferred from Stitching to finished goods, (k) cost of goods sold, and (l) sales.

Answer 1

No.	Date	General Journal	Debit	Credit
1	May-31	Raw materials inventory	45000
		Accounts payable		45000
		(To record purchase of raw materials)
2	May-31	Work in process inventory-Cutting	22750
		Raw materials inventory		22750
		(To record direct materials used in production)
3	May-31	Factory overheads	18000
		Raw materials inventory		18000
		(To record indirect materials used in production)
4	May-31	Work in process inventory-Cutting	17600
		Work in process inventory-Stitching	70400
		Factory wages payable		88000
		(To record direct labor cost incurred)
5	May-31	Factory overheads	55800
		Factory wages payable		55800
		(To record indirect labor cost incurred)
6	May-31	Factory wages payable	143800
		Cash		143800
		(To record payment of total factory payroll)
7	May-31	Factory overheads	51000
		Other Accounts		51000
		(To record other overhead costs incurred)
8	May-31	Work in process inventory-Cutting (150% x $22750)	34125
		Work in process inventory-Stitching (120% x $70400)	84480
		Factory overheads		118605
		(To record overhead applied)
9	May-31	Work in process inventory-Stitching	77475
		Work in process inventory-Cutting		77475
		(To record transferred costs of partially completed goods)
10	May-31	Finished goods inventory	262755
		Work in process inventory-Stitching		262755
		(To record transfer of completed products to finished goods)
11	May-31	Cost of goods sold	274605
		Finished goods inventory		274605
		(To record cost of goods sold)
12	May-31	Cash/Accounts receivable	416000
		Sales revenue		416000
		(To record sale of finished goods)

Working:

Work in process inventory-Cutting
Beginning balance	83500
Add: Costs incurred during the month	74475
(22750 + 17600 + 34125)
	157975
Less: Ending inventory	80500
Transferred to Work in process inventory-Stitching	77475
Work in process inventory-Stitching
Beginning balance	103300
Add: Costs incurred during the month	232355
(77475 + 70400 + 84480)
	335655
Less: Ending inventory	72900
Transferred to finished goods inventory	262755
Finished goods inventory
Beginning balance	28100
Add: Transferred from Work in process inventory-Stitching	262755
Cost of goods available for sale	290855
Less: Ending inventory	16250
Cost of goods sold $	274605