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 183,500 130,500 Work in process inventory—Stitching 203,300 103,900 Finished goods inventory 48,100 36,250 The following additional information describes the company's production activities for May. Direct materials Raw materials purchased on credit $ 95,000 Direct materials used—Cutting 25,250 Direct materials used—Stitching 0 Direct labor Direct labor—Cutting $ 22,600 Direct labor—Stitching 90,400 Total factory payroll paid (in cash) 170,800 Factory Overhead (Actual costs) Indirect materials used $ 54,000 Indirect labor used 57,800 Other overhead costs 61,000 Factory Overhead Rates Cutting (150% of direct materials used ) Stitching (120% of direct labor used ) Sales $816,000 rev: 01_28_2020_QC_CS-197408

Problem 20-1A Part 2 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

			in $
	Information	Beginning Inventory	Ending inventory
	Work In process Inventory-Cutting	$183500	130500
	Work In process Inventory-Stiching	203300	103900
	Finished Goods iNventory	48100	36250
	Raw material Purchased	95000
	Direct material used-Cutting	25250
	Direct material used-Stiching	0
	Direct labor -cutting	22600
	Direct labor -Stiching	90400
	Total direct labor F	113000
	Total factory paid T	170800
	Actual cost
	Indirect material	54000
	Indirect labor	57800
	Other	61000
	Total	172800
	Factory overhead rate for Cutting	150% of Direct material used
	Factory overhead rate for Stiching	120% of direct labor used
answer	Now entries	Dr	CR
a)	Raw Material Inventory	95000
	Accounts payable		95000
b)	Work In process Inventory-Cutting	25250
	Raw Material Inventory		25250
c)	Manufacturing overhead	54000
	Raw Material Inventory		54000
d)	Work In process Inventory_cutting	22600
	Work In process Inventory-Stiching	90400
	Wages payable		113000
e)	Manufacturing overhead	57800
	Wages payable		57800
f)	Wages payable	170800
	Cash		170800
g)	Manufacturing overhead	61000
	Other Accounts		61000
h)	Work In process Inventory_cutting (150%*2520)+(120%22600)	64995
	Work In process Inventory-Stiching (90400*120%)	108480
	Manufacturing overhead		173475
i)	Work In process Inventory-Stiching	165845
	Work In process Inventory_cutting		165845
	working
	Work In process Inventory_cutting-Transferred
	(183500+22600+25250+64955-130500)	165845
j)	Finished goodsinventory	298280
	Work In process Inventory-Stiching		298280
	Work In process Inventory-Stiching-Transferred
	203300-103900+0+90400+108480	298280
k)	Cost of good sold	310130
	Finished goodsinventory		310130
	(48100+298280-36250)
l)	Accounts Receivable	816000
	Sales		816000
If any doubt please comment