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 $ 41,000 $ 48,700 Work in process inventory—Cutting 113,500 95,500 Work in process inventory—Stitching 133,300 82,200 Finished goods inventory 34,100 22,250 The following additional information describes the company's production activities for May. Direct materials Raw materials purchased on credit $ 60,000 Direct materials used—Cutting 23,500 Direct materials used—Stitching 0 Direct labor Direct labor—Cutting $ 19,100 Direct labor—Stitching 76,400 Factory Overhead (Actual costs) Indirect materials used $ 28,800 Indirect labor used 56,400 Other overhead costs 54,000 Factory Overhead Rates Cutting 150% of direct materials used Stitching 120% of direct labor used Sales $ 536,000 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

Section: Chapter Questions

Problem 1Q

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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 $ 41,000 $ 48,700 Work in process inventory—Cutting 113,500 95,500 Work in process inventory—Stitching 133,300 82,200 Finished goods inventory 34,100 22,250 The following additional information describes the company's production activities for May. Direct materials Raw materials purchased on credit $ 60,000 Direct materials used—Cutting 23,500 Direct materials used—Stitching 0 Direct labor Direct labor—Cutting $ 19,100 Direct labor—Stitching 76,400 Factory Overhead (Actual costs) Indirect materials used $ 28,800 Indirect labor used 56,400 Other overhead costs 54,000 Factory Overhead Rates Cutting 150% of direct materials used Stitching 120% of direct labor used Sales $ 536,000 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

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