Problem 20-1A Production cost flow and measurement; journal entries LO P1, P2, 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: Beginning Ending InventoryInventory Work in process inventory- 243,500 160,500 Cutting Work in process inventory- 263,300 122,500 Stitching Finished goods inventory 60, 100 48, 250 The following additional information describes the company's production activities for May. $125,000 Direct materials Raw materials purchased on credit Direct materials used- Cutting Direct materials used- Stitching 26,750 0 Direct labor Direct labor-Cutting Direct labor-Stitching Total factory payroll paid (in cash) $ 25,600 102,400 187,000 Factory Overhead (Actual costs) Indirect materials used $75,600 Indirect labor used 59,000 Other overhead costs 67,000 Factory Overhead Rates Cutting (150% of direct) materials used Stitching (120% of direct labor Sales $1,056,000 used' Problem 20-1A Part 1 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. Work in Process (WIP) - Cutting Work in Process (WIP) - Stitching Finished Goods (FG) 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, (i) goods transferred from Stitching to finished goods, (k) cost of goods sold, and (1) sales. View transaction list Journal entry worksheet Record purchase of raw materials. Note: Enter debits before credits. Date General Journal Debit Credit May 31 Record entry View general journal Clear entry Required information Problem 20-1A Production cost flow and measurement; journal entries LO P1, P2, 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: Beginning Ending InventoryInventory Work in process inventory- 243,500 160,500 Cutting Work in process inventory- 263,300 122,500 Stitching Finished goods inventory 60, 100 48,250 The following additional information describes the company's production activities for May. $125,000 Direct materials Raw materials purchased on credit Direct materials used- Cutting Direct materials used- Stitching 26,750 0 Direct labor Direct labor-Cutting Direct labor-Stitching Total factory payroll paid (in cash) $ 25,600 102,400 187,000 Factory Overhead (Actual costs) Indirect materials used $75,600 Indirect labor used 59,000 Other overhead costs 67,000 Factory Overhead Rates Cutting (150% of direct) materials used' Stitching (120% of direct labor) used Sales $1,056,000 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 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, (i) goods transferred from Stitching to finished goods, (k) cost of goods sold, and (1) sales. View transaction list Journal entry worksheet
