Required information Problem 20-5A (Algo) 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 available regarding its May inventories Beginning Ending Inventory Inventory How materials inventory $ 96,000 5 116,350 Work in process inventory-cutting 223,500 150,500 Work in process inventory-Stitching 243,300 116,300 Finished goods inventory 56,100 44,250 The following additional information describes the company's production activities for May Direct materials Raw materials purchased on credit Direct materials used cutting Direct materials used-stitching $ 115,000 26,250 Direct lobor Direct Labor-Cutting Direct labor-stitching $ 24,600 98,400 Factory Overhead (actual costs) Indirect materials used Indirect Labor used Other overhead costs $ 58,400 58,600 65,000 Factory Overhead Rates Cutting Stitching 150% of direct materials used 120% of direct labor used Sales $ 978,000 Problem 20-5A (Algo) 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. Hint Compute the total production costs in each department and then subtract the ending inventory to get the amount transferred out of each department (e) Transferred to work in process Stitching (b) Transferred to finished goods (c) Cost of goods sold Problem 20-5A (Algo) Part 2 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 g. 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 View transaction list Journal entry worksheet Record purchase of raw materials. Note: Enter debits before credits. View transaction list Journal entry worksheet Record indirect materials used in production. Note: Enter debits before credits. Date General Journal Debit Credit May 31 View transaction list Journal entry worksheet 3 N 4 5 6 7 8 .... 11 Record direct labor cost incurred, but not yet paid. Note: Enter debits before credits. Date General Journal Debit Credit May 31 View transaction list Journal entry worksheet Record indirect labor cost incurred, but not yet paid. Note: Enter debits before credits. Date General Journal Debit Credit May 31. View transaction list Journal entry worksheet Record overhead applied at 150% of direct materials costs (Cutting) and 120% of direct labor cost (Stitching). Note: Enter debits before credits. Date General Journal Debit Credit May 31 View transaction list Journal entry worksheet 1 2 3 4 5 6 7 8 8 11 > Record transfer of goods from the Cutting department to the Stitching department. Note: Enter debits before credits. Date General Journal Debit Credit May 31 View transaction list Journal entry worksheet 1 4 5 6 7 8 9 10 11 Record the transfer of completed products from production to finished goods inventory. Note: Enter debits before credits Date General Journal Debit Credit May 31 View transaction list Journal entry worksheet B. 5 6 7 8 9 10 11 Record the sale of finished goods on account. Note: Enter debits before credits. Date General Journal Debit Credit May 31 View transaction list Journal entry worksheet 4 5 6 7 7 8 10 11 Record cost of goods sold for May. Note: Enter debits before credits Date General Journal Debit Credit May 31