Question

production generated the following activity in Chopper Chassis​ Company's Work-in-Process Inventory​ account: LOADING...​(Click the icon to view the​ activity.) ​Additionally, Chopper has completed Jobs 142 and​ 143, with total costs of $ 46 comma 000 and $ 50 comma 000​, respectively. Read the requirementsLOADING.... Requirement 1. Prepare the journal entry for production completed in June. ​(Prepare a single journal entry for this event. Record debits​ first, then credits. Exclude explanations from any journal​ entries.) Date Accounts Debit Credit June C

Answer 1

Answer:

Finished Goods : Job 142 $ 46,000 (debit)

Finished Goods : Job 143 $ 50,000 (debit)

Work In Process : Job 142 $ 46,000 (credit)

Work In Process : Job 143 $ 50,000 (credit)

Explanation:

During Production all Costs Incurred are accumulated in the Work In Process Account.

Once the Production is Complete and Jobs are Transferred to Finished Goods, the Costs in Work In Process Account is De-recognized. Consequently Costs are recognized in Finished Goods Inventory for Valuation purposes.

These cost would later form part of Cost of Sales when the Jobs are Finally Sold to the Customer.