1. Compute the cost of products transferred from production to finish goods and
ID: 2525898 • Letter: 1
Question
1. Compute the cost of products transferred from production to finish goods and cost of good sold. 2. Prepare summary journal entries dated May 31 to record the following production activities during May: (a) raw materials purchased, (b) Direct material usage, (c) and direct material usage, (d) Direct labor cost incurred, (e) Direct labor cost incurred, (f) payment of factory wages, (g) other overhead costs, (h) overhead applied, (I) good transferred from production to finish goods, and (j) sale of finished goods. View transactions list: 1. Record purchase of raw material 2. Record direct materials used in production 3. Record indirect materials used in production 4. Record direct labor cost incurred, but not yet paid 5. Record indirect labor cost incurred, but not yet paid 6. Record payment of total factory payroll 7. Record other overhead costs incurred (Credit other accounts) 8. Record overhead applied at 115% of direct labor costs 9. Record the transfer of completed products from production to finish good inventory 10. Record the sales of finished goods 11. Record cost of good sold for MayExplanation / Answer
Sierra Company Journal Entries For the Year ended May 31st Particular Amount (Dr) Amount(Cr Raw Material $ 250,000.00 To Accounts Payable $ 250,000.00 (Being amount of Raw Material purchased on credit) WIP $ 157,500.00 (Direct ) Factory Overhead $ 60,000.00 (Indirect) To Raw Material $ 217,500.00 (Being amount of Raw Material used in production) WIP $ 780,000.00 (Direct) Factory Overhead $ 750,000.00 (Indirect) To Factory Payroll Payable $ 1,530,000.00 Factory Payroll Payable $ 1,530,000.00 To Cash $ 1,530,000.00 (Being amount of Factory Payroll Paid) Factory Overhead $ 87,000.00 To Other Overhead $ 87,000.00 (Being amount of Other overhead charges to factory overhead) WIP=($780000*115%) $ 897,000.00 To Factory Overhead(Applied) $ 897,000.00 (Being amount of overhead appled ) Finished Goods $ 1,754,500.00 To WIP $ 1,754,500.00 (Being amount of cost of goods manufactured) Accounts Receivable $ 2,500,000.00 To Sales $ 2,500,000.00 (Being amount of sales on credit) Cost of goods sold $ 1,782,500.00 To Finished goods $ 1,782,500.00 (Being amount of cost of goods sold) T-Accounts Raw Material Particular Amount Particular Amount To Balance b/d $ 60,000.00 By WIP $ 157,500.00 To Accounts Payable $ 250,000.00 By Factory Overhead $ 60,000.00 By Balance C/d $ 92,500.00 $ 310,000.00 $ 310,000.00 WIP Particular Amount Particular Amount To Balance b/d $ 435,000.00 By Finished goods $ 1,754,500.00 To Raw Material $ 157,500.00 By Balance C/d $ 515,000.00 To Factory Payroll Payable $ 780,000.00 To Factory Overhead $ 897,000.00 $ 2,269,500.00 $ 2,269,500.00 Factory Payroll Payable Particular Amount Particular Amount To Cash $ 1,530,000.00 By WIP $ 780,000.00 By Factory Overhead $ 750,000.00 $ 1,530,000.00 $ 1,530,000.00 Factory Overhead Particular Amount Particular Amount To Raw Material $ 60,000.00 By WIP $ 897,000.00 To Factory Payroll payable $ 750,000.00 To Other Overhead $ 87,000.00 $ 897,000.00 $ 897,000.00 Finished Goods Particular Amount Particular Amount To bal b/d $ 633,000.00 By Cost of goods sold $ 1,782,500.00 To WIP $ 1,754,500.00 By Balance C/d $ 605,000.00 $ 2,387,500.00 $ 2,387,500.00 Cost of goods sold Particular Amount Particular Amount To Finished goods $ 1,782,500.00 By Balance C/d $ 1,782,500.00 $ 1,782,500.00 $ 1,782,500.00 Sales Particular Amount Particular Amount By Balance C/d $ 2,500,000.00 By Accounts Receivable $ 2,500,000.00 $ 2,500,000.00 $ 2,500,000.00 Sierra Company For the Year Ended May 31st Sales $ 2,500,000.00 Cost of goods sold $ 1,782,500.00 Gross Profit $ 717,500.00
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