[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 Inventory Ending Inventory Raw materials inventory Work in process inventory-Cutting Work in process inventory-Stitching Finished goods inventory $ 46,000 123,500 $ 54,850 100,500 143,300 36,100 85,300 24,250 The following additional information describes the company's production activities for May. Direct materials Raw materials purchased on credit Direct materials used-Cutting $ 65,000 23,750 Direct materials used-Stitching Direct labor Direct labor-Cutting Direct labor-Stitching Factory Overhead (Actual costs) Indirect materials used Indirect labor used Other overhead costs Factory Overhead Rates Cutting Stitching Sales $ 19,600 78,400 $ 32,400 56,600 55,000 150% of direct materials used 120% of direct labor used $ 576,000 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. (a) 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 1 2 3 4 5 6 7 8 11 > Record purchase of raw materials