Question

Required information Problem 03-1A Production cost flow and measurement, journal entries LO P1, P2, P3, P4 [The following information applies to the questions displayed below.] Sierra Company manufactures 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: Work in process inventory-Cutting Work in process inventory-Stitching Finished goods inventory Beginning Inventory 153,500 173,300 42,100 Ending Inventory 115, see 94.669 30,250 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 $ 80,000 24,500 Direct labor Direct labor-cutting Direct labon-stitching Total factory payroll paid (in cash) $ 21,100 34.400 162,700 Factory Overhead (Actual costs) Indirect materials used Indirect Tahor niend 4,200

Answer 1

Journal Entries:- Sierra Company
Serial	Date	Accounts Title	Debit $	Credit $
1	31-May	Raw Material Invenry	$80,000
		Accounts Payable		$80,000
		To Record raw material purchased on credit
2	31-May	WIP-Cutting	$24,500
		Raw Material Invenry		$24,500
		To Record raw material applied Cutting process
3	31-May	Facry Overhead	$43,200
		Raw Material Invenry		$43,200
		TO Record indirect material
4	31-May	WIP-Cutting	$21,100
		WIP-Stitching	$84,400
		Payroll payable		$105,500
		TO Record labor applied production
5	31-May	Factory overhead	$57,200
		payroll payable		$57,200
		To Record Indirect Labour
6	31-May	Payroll Payable	$162,700
		Cash		$162,700
		TO Record Payroll Paid in Cash
7	31-May	Factory overhead	$58,000
		Other accounts		$58,000
		To Record other Overhead
8	31-May	WIP-Cutting (80000*150%)	$120,000
		WIP-Stitching (84400*120%)	$101,280
		Factory overhead		$221,280
		TO Record Overhead Aplied
9	31-May	WIP-Stitching	$203,600
		WIP-Cutting (24500( Material)+21100 (Labour)+120000 ( OH)+153500 ( Opg WIP)-115500 (Clg WIP)		$203,600
		TO Record partially completed goods transferred
10	31-May	FG Invenry (84400 ( Labour)+101280 ( OH)+203600 (trf from cutting)+173300 ( Opg WIP)-94600 (Clg WIP))	$467,980
		WIP-Stitching		$467,980
		To Record finished goods transferred
11	31-May	COGS (42100 Opg FG+467980(WIP))-30250 ( Clg FG)	$479,830
		FG Inventory		$479,830
		TO Record COGS
12	31-May	Accounts Receivable	$696,000
		Sales revenue		$696,000
		TO Record sales made