Q.17-22E-c - Horngren'S Financial And Managerial Accounting

Question

June production generated the following activity in Bentley Chassis Company’s Work-in-Process Inventory account:

June 1 balance	\(36,000
Direct materials used	32,000
Direct labor assigned to jobs	40,000
Manufacturing overhead allocated to jobs	28,000

Additionally, Bentley Chassis has completed Jobs 142 and 143, with total costs of

\)37,000 and \(48,000, respectively.

Requirements

3. Prepare the journal entry to record the sale on account of Job 143 for \)63,000.

Also, prepare the journal entry to record Cost of Goods Sold for Job 143.

Step-by-Step Solution

Answer

Date	Particulars	Debit ($)	Credit ($)
1	Accounts receivable	63,000
	Sales revenue		63,000
	(to record sales on account)
2	Cost of goods sold	48,000
	Finished goods inventory		48,000
	(to record the cost of good sold for job 143)

Sales revenue

Sales revenue is calculated by multiplying the unit price of the product with the number of units sold by the company during the year.

Recording of sales and cost of goods sold in the books of the company

The company record the sales of the company by debiting the account receivable and crediting the sales revenue and the cost of good sold is recorded by debiting the cost of goods sold by the company and crediting the finished goods inventory.