ework 6 He Required information Problem 20-1A Production cost flow and measureme

Question

ework 6 He Required information Problem 20-1A 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. Deta below are for one of its processing departments. The following Information is available regardling its May Inventories Beginning Ending Inventory Invent Raw naterials inventory Work in proceas inventory Finished goods inventory 62,000 $103,500 435,000 583,000 626,000 575,000 The following additional information describes the company's production activities for May 280,000 1,566,000 Raw naterials purchases (on credit) Factory vages cost (paid in canh) Other overhead cost (other Accounta credited) Materials used 128,000 Direct Indirect S 172,500 66,000 Labor used Direct Indirect 800,000 766, 000 120% Overhead rate as a percent of direet labor Sales (on credit) 3,500,000 The predetermined overhead rate was computed at the beginning of the year as t20% of direct labor cost Problem 20-1A Part 2 Next > 4of7 Prev 57

Explanation / Answer

Raw materials (RM) Work in process (WIP) Beg bal 435,000 Trsfd 1,784,500 Beg bal 62,000 Direct M 172,500 DM used 172,500 purchases 280,000 indirect mat 66,000 DL used 800,000 OH applied 960000 ending bal 103,500 end bal 583,000 Factory wages payable finished goods (FG) cash 1,566,000 dL used 800,000 beg bal 626,000 COGS 1,835,500 indirect la 766,000 Tsfd 1,784,500 end bal 0 end bal 575,000 Factory overhead income statement (partial) other 128,000 oh applied 960,000 Sales 3,500,000 indirct mat 66,000 cost of goods sold 1,835,500 indirect la 766,000 Gross margin 1,664,500 end bal 0 0 Cost of goods transferred 1,784,500 Cost of goods sold 1,835,500 Journal Entries Date General Journal Debit Credit a) Raw materials inventory 280,000 Accounts payable 280,000 b) Work in process inventory 172,500 Raw materials inventory 172,500 c) Facotry overhead 66,000 Raw materials inventory 66,000 d) Work in process inventory 800,000 Factory wages payable 800,000 e) Facotry overhead 766,000 Factory wages payable 766,000 f) Factory wages payable 1,566,000 cash 1,566,000 g) Factory overhead 128,000 other accounts 128,000 h) Work in process inventory 960000 factory overhead 960000 i) Finished goods inventory 1,784,500 Work in process inventory 1,784,500 j) Cost of goods sold 1,835,500 finished goods invnetory 1,835,500 Accounts receivable 3,500,000 sales 3,500,000

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