Q.18-20RQ - Horngren'S Financial And Managerial Accounting

Question

Question: Department 4 has completed production on units that have a total cost of $15,000. The units are ready for sale. Give the journal entry.

Step-by-Step Solution

Answer

Answer

Date	Particulars	Debit ($)	Credit ($)
	Finished goods inventory	15,000
	WIP inventory		15,000

Step 1: WIP inventory

The work in process inventory means the inventory which are under processing and are partially completed. It is the inventory which is currently in the production process at the end of the accounting period.

Step 2: Recording of the total cost when the production is completed

When the production is completed, the work in process inventory is transferred to the finished goods inventory by debiting the finished goods inventory account and by crediting the WIP inventory account.