Question

Required information Problem 16-1A Production cost flow and measurement; journal entries LO P1, P2, P3, P4 The following information applies to the questions displayed below.) Sierra Company manufactures woven blankets and accounts for product costs using process costing. Data below are for one of its processing departments. The following information is available regarding its May inventories Raw materials inventory Work in process inventory Finished goods inventory Beginning Ending Inventory Inventory $ 61,000 $68,000 405,500 577,000 630,000 562,000 The following additional information describes the company's production activities for May $ 280,000 1,586,000 5,000 $ Raw materials purchases (on credit) Factory wages cost (paid in cash) Other overhead cost (other Accounts credited) Materials used Direct Indirect Labor used Direct Indirect Overhead rate as a percent of direct labor Sales (on credit) 205,000 68,000 $ 790,000 796,000 110% $2,500,ese The predetermined overhead rate was computed at the beginning of the year as 110% of direct labor cost

Answer 1

Journal Entries
Date	General Journal				Debit	Credit
1)	Raw materials inventory				280,000
	Accounts payable					280,000
2)	Work in process inventory				205,000
	Raw materials inventory					205,000
3)	Facotry overhead				68,000
	Raw materials inventory					68,000
4)	Work in process inventory				790,000
	Factory wages payable					790,000
5)	Facotry overhead				796,000
	Factory wages payable					796,000
6)	Factory wages payable				1,586,000
	cash					1,586,000
7)	Factory overhead				5,000
	other accounts					5,000
8)	Work in process inventory				869000
	factory overhead					869000
9)	Finished goods inventory				1,692,500
	Work in process inventory					1,692,500
10)	Accounts receivable				2,500,000
	sales					2,500,000
11)	Cost of goods sold				1,760,500
	finished goods invnetory					1,760,500