Mulligan, Inc., which uses a process-cost accounting system, passes completed production from Department A to Department B for further manufacturing. The journal entry to record completed production in Department A requires:

a. a debit to Finished-Goods Inventory and a credit to Work-in-Process Inventory: Department A.

b. a debit to Finished-Goods Inventory and a credit to Work-in-Process Inventory.

c. a debit to Work-in-Process Inventory and a credit to Finished-Goods Inventory.

d. a debit to Work-in-Process Inventory: Department B and a credit to Work-in-Process Inventory: Department A.

e. a debit to Work-in-Process Inventory: Department A and a credit to Work-in-Process Inventory: Department B.

Question

Business

Gillian Krause

24 February, 01:38

Mulligan, Inc., which uses a process-cost accounting system, passes completed production from Department A to Department B for further manufacturing. The journal entry to record completed production in Department A requires:

a. a debit to Finished-Goods Inventory and a credit to Work-in-Process Inventory: Department A.

b. a debit to Finished-Goods Inventory and a credit to Work-in-Process Inventory.

c. a debit to Work-in-Process Inventory and a credit to Finished-Goods Inventory.

d. a debit to Work-in-Process Inventory: Department B and a credit to Work-in-Process Inventory: Department A.

e. a debit to Work-in-Process Inventory: Department A and a credit to Work-in-Process Inventory: Department B.

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Answers (1)

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Paisley · Answer 1

d. a debit to Work-in-Process Inventory: Department B and a credit to Work-in-Process Inventory: Department A.

Explanation:

The journal entry is shown below:

Work in progress inventory - Department B A/c Dr

To Work in progress inventory - Department A A/c

(Being the completed production is recorded)

For recording, we debited the Work-in-Process Inventory - Department B Account and credited the Work-in-Process Inventory - Department A Account so that the correct posting can be done