Problem 16-1A Production cost flow and measurement journal entries LO P1, P2, P3
ID: 2329868 • Letter: P
Question
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. Beginning Ending Inventory Inventory s 60,000 92.500 Raw materials inventory Work in process inventory Pinished goods inventory 435,000 515,000 633.000 605,000 The following additional information describes the company's production activities for Raw materials purchases (on credit) Factory wages cost (paid in cash) Other overhead cost (Other Accounts credited) Materials used $ 250,000 1,530,000 87,000 Direet Indirect $ 157,500 60,000 Labor uned $ 780,000 750,000 115 $2.500,000 Direct Indireat overhead rate as a percent of direct labor Sales (on credit)Explanation / Answer
Raw materials (RM) Work in process (WIP) Beg bal 435,000 Trsfd 1,754,500 Beg bal 60,000 Direct M 157,500 DM used 157,500 purchases 250,000 indirect mat 60,000 DL used 780,000 OH applied 897000 ending bal 92,500 end bal 515,000 Factory wages payable finished goods (FG) cash 1,530,000 dL used 780,000 beg bal 633,000 COGS 1,782,500 indirect la 750,000 Tsfd 1,754,500 end bal 0 end bal 605,000 Factory overhead income statement (partial) other 87,000 oh applied 897,000 Sales 2,500,000 indirct mat 60,000 cost of goods sold 1,782,500 indirect la 750,000 Gross margin 717,500 end bal 0 0 Cost of goods transferred 1,754,500 Cost of goods sold 1,782,500 Journal Entries Date General Journal Debit Credit a) Raw materials inventory 250,000 Accounts payable 250,000 b) Work in process inventory 157,500 Raw materials inventory 157,500 c) Facotry overhead 60,000 Raw materials inventory 60,000 d) Work in process inventory 780,000 Factory wages payable 780,000 e) Facotry overhead 750,000 Factory wages payable 750,000 f) Factory wages payable 1,530,000 cash 1,530,000 g) Factory overhead 87,000 other accounts 87,000 h) Work in process inventory 897000 factory overhead 897000 i) Finished goods inventory 1,754,500 Work in process inventory 1,754,500 j) Cost of goods sold 1,782,500 finished goods invnetory 1,782,500 Accounts receivable 2,500,000 sales 2,500,000