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 $ 6,000 $ 9,250 Work in process inventory—Cutting 43,500 51,500 Work in process inventory—Stitching 63,300 60,500 Finished goods inventory 20,100 8,250 The following additional information describes the company's production activities for May. Direct materials   Raw materials purchased on credit $ 25,000 Direct materials used—Cutting 21,750 Direct materials used—Stitching 0 Direct labor   Direct labor—Cutting $ 15,600 Direct labor—Stitching 62,400 Factory Overhead (Actual costs)   Indirect materials used $ 6,000 Indirect labor used 55,000 Other overhead costs 46,505 Factory Overhead Rates   Cutting 150% of direct materials used Stitching 120% of direct labor used     Sales $ 256,000     2.Prepare May 31 journal entries to record the following May activities: Raw materials purchases Direct materials used Indirect materials used Direct labor used Indirect labor used Other overhead costs paid in cash Overhead applied Goods transferred from Cutting to Stitching Goods transferred from Stitching to finished goods Sales (on account) Cost of goods sold

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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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 $ 6,000 $ 9,250
Work in process inventory—Cutting 43,500 51,500
Work in process inventory—Stitching 63,300 60,500
Finished goods inventory 20,100 8,250

The following additional information describes the company's production activities for May.

Direct materials  
Raw materials purchased on credit $ 25,000
Direct materials used—Cutting 21,750
Direct materials used—Stitching 0
Direct labor  
Direct labor—Cutting $ 15,600
Direct labor—Stitching 62,400
Factory Overhead (Actual costs)  
Indirect materials used $ 6,000
Indirect labor used 55,000
Other overhead costs 46,505
Factory Overhead Rates  
Cutting 150% of direct materials used
Stitching 120% of direct labor used
   
Sales $ 256,000

 

 

2.Prepare May 31 journal entries to record the following May activities:

  1. Raw materials purchases
  2. Direct materials used
  3. Indirect materials used
  4. Direct labor used
  5. Indirect labor used
  6. Other overhead costs paid in cash
  7. Overhead applied
  8. Goods transferred from Cutting to Stitching
  9. Goods transferred from Stitching to finished goods
  10. Sales (on account)
  11. Cost of goods sold
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