Question

Sereno Company makes piñatas for children’s birthday parties. Information for Sereno’s last six months of operation is listed below. Required: Prepare the journal entries to record each of the following transactions. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) (a) Purchased $15,600 of raw materials on credit. (b) Issued $9,200 of direct materials into production. (c) Recorded $16,500 in direct labor. (d) Applied $24,000 in manufacturing overhead. (e) Completed pinatas costing $39,500. (f) Recorded $16,000 in actual manufacturing overhead. (g) Sold piñatas for $66,000 that cost $44,000 to produce (assume that Sereno Company uses a perpetual inventory system).

Answer 1

Transactions	Accounts tittles and explanation	Debit	Credit
a.	Raw materials inventory	$15,600
	...Accounts Payable		$15,600
	(To record the raw materials on credit)
b.	Work in process inventory	$9,200
	...Raw materials Inventory		$9,200
	(To record the issuance of raw materials into production)
c.	Work in process inventory	$16,500
	...Wages payable		$16,500
	(To record the direct labor)
d.	Work in process inventory	$24,000
	...Manufacturing overhead		$24,000
	(To record the manufacturing overhead)
e.	Finished goods inventory	$39,500
	...Work in process inventory		$39,500
	(To record the pinatas costing)
f.	Manufacturing overhead	$16,000
	...Miscellaneous Accounts		$16,000
	(To record the actual manufacturing overhead)
h.	Accounts receivables or cash	$66,000
	...Sales Revenue		$66,000
	(To record the sales revenue)
	Cost of goods sold	$44,000
	...Finished goods inventory		$44,000
	(To record the cost of goods sold)