Hornsby has a single production department, and uses a process-costing system. The balance in its Work-in-Process account on January 1 was $68,000. The account was charged with direct materials, direct labor, and manufacturing overhead of $450,000 throughout the year. If a review of the accounting records determined that $86,000 of goods were still in production at year-end, Hornsby should make a journal entry on December 31 that includes: 1. a debit to Work-in-Process Inventory for $432,000. 2. a debit to Finished - Goods Inventory for $432,000. 3. a credit to Work-in-Process Inventory for $86,000. 4. a debit to Cost of Goods Sold for $432,000. 5. a debit to Finished-Goods Inventory for $86,000.

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Business

Yasmin Russo

9 November, 19:50

Hornsby has a single production department, and uses a process-costing system. The balance in its Work-in-Process account on January 1 was $68,000. The account was charged with direct materials, direct labor, and manufacturing overhead of $450,000 throughout the year. If a review of the accounting records determined that $86,000 of goods were still in production at year-end, Hornsby should make a journal entry on December 31 that includes: 1. a debit to Work-in-Process Inventory for $432,000. 2. a debit to Finished - Goods Inventory for $432,000. 3. a credit to Work-in-Process Inventory for $86,000. 4. a debit to Cost of Goods Sold for $432,000. 5. a debit to Finished-Goods Inventory for $86,000.

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Nehemiah Chase · Answer 1

2. a debit to Finished - Goods Inventory for $432,000.

Finished good will be debited to represent the amount of production during the period. This will later become cost of goods sold when sales occurs.

Explanation:

beginning WIP 68,000

added cost 450,000

ending WIP (86,000)

Cost of goods manufactured (finished goods) 432,000