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2- 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 Inventory			Ending Inventory
Raw materials inventory	$	66,000		$	55,000
Work in process inventory		436,000			599,000
Finished goods inventory		608,000			559,000

The following additional information describes the company's production activities for May.

Raw materials purchases (on credit)	$	260,000
Factory wages cost (paid in cash)		1,585,000
Other overhead cost (Other Accounts credited)		91,000
Materials used
Direct	$	187,000
Indirect		84,000
Labor used
Direct	$	800,000
Indirect		785,000
Overhead rate as a percent of direct labor		120	%
Sales (on credit)	$	3,500,000

The predetermined overhead rate was computed at the beginning of the year as 120% of direct labor cost.

Prepare summary journal entries dated May 31 to record the following production activities during May: (a) raw materials purchases, (b) direct materials usage, (c) indirect materials usage, (d) direct labor costs incurred, (e) indirect labor costs incurred, (f) payment of factory payroll, (g) other overhead costs, (h) overhead applied, (i) goods transferred from production to finished goods, and (j) sale of finished goods.

Find

May 31 Cost of goods sold & Finished goods inventory

Date General Journal Debit Credit

May 31 Raw materials inventory 280,000

Accounts payable 280,000

May 31 Work in process inventory 173,500

Raw materials inventory 173,500

May 31 Factory overhead 64,000

Raw materials inventory 64,000

May 31 Work in process inventory 790,000

Factory payroll payable 790,000

May 31 Factory overhead 768,000

Factory payroll payable 768,000

May 31 Factory payroll payable 1,558,000

Cash 1,558,000

May 31 Factory overhead 37,000

Other accounts 37,000

May 31 Work in process inventory 869,000

Factory overhead 869,000

May 31 Finished goods inventory

Work in process inventory

May 31 Accounts receivable 4,500,000

Sales 4,500,000

May 31 Cost of goods sold

Finished goods inventory

erra Company mnfactres woven blnkets and accounts tor product costs Using process costing. Dta below are tor one of its processing departments. The following information is available regarding its May inventories Beginning Ending Raw materials inventory Work in process inventory Finished goods inventory 66,88e 55,eae 436,888 599,88e 688,88e 559,88e The following additional information describes the company's production activities for May. Raw materials purchases (on credit) Factory wages cost (paid in cash) Other overhead cost (Other Accounts credited) Materials used $260,8ae 1,585,88e 91,888 Direct Indirect $187,88e 84,88e Labor used Direct Indirect $ 80,e3e 785,88e Overhead rate as a percent of direct labor Sales (on credit) 12e% $3,58e,83e The predetermined overhead rate was computed at the beginning of the year as 120% of direct labor cost. Requlred: 1. Compute the cost of products transferred from production to finished goods and cost of goods sold. RM- April 30 RM purchases 68,000 Indirect materials 84,000WIP - April 30 438,000 Cost of goods manuf 187.000 800,000 187.000 599,000 260,000 DM used 187.000 DM used DL used Overhead applied WIP - May 31 RM-May 31 55,000 Factory Wages Payable Finished Goods (FG) Total Factory wages paid1,585,000 Indirect labor FG - April 30 Cost of goods manuf 608,000 Cost of goods sold DL used FG - May 31 559,000 Income Statement (Partial) ndirect materials ndirect labor Other overhead costs 84,000 785,000 91,000 S 3,500,000 Cost of goods sold Gross profit S 3,500,000 Underapplied OH 960,000 Cost of goods transferred Cost of goods sold

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