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Problem 16-5A (Static) Production cost flow and measurement; journal entries LO P3, P4 [The following information applies to the questions displayed below.] 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: The following additional information describes the company's production activities for May. Required: 1. Compute the amount of (a) production costs transferred from Cutting to Stitching, (b) production costs transferred from Stitching to finished goods, and (c) cost of goods sold. Hint: Compute the total production costs in each department and then subtract the ending inventory to get the amount transferred out of each department. 2. Prepare May 31 journal entries to record the following May activities: a. Raw materials purchases b. Direct materials used c. Indirect materials used d. Direct labor used e. Indirect labor used f. Other overhead costs paid in cash 9. Overhead applied h. Goods transferred from Cutting to Stitching i. Goods transferred from Stitching to finished goods j. Sales (on account) k. Cost of goods sold Required information 1 Record purchase of raw materials. 2 Record direct materials used in production. 3 Record indirect materials used in production. 4 Record direct labor cost incurred, but not yet paid. 5 Record indirect labor cost incurred, but not yet paid. 6 Record payment of other overhead. 7 Record overhead applied at 150% of direct materials costs (Cutting) and 120% of direct labor cost (Stitching). Note : = journal entry has been entered 6 Record payment of other overhead. 7 Record overhead applied at 150% of direct materials costs (Cutting) and 120% of direct labor cost (Stitching). 8 Record transfer of goods from the Cutting department to the Stitching department. 9 Record the transfer of completed products from production to finished goods inventory. 10 Record the sale of finished goods on account. 11 Record cost of goods sold for May. Note : = journal entry has been entered