Question

The cost of production of completed and transferred goods during the period amounted to $540,000, and the finished products shipped to customers had production costs of $375,000. The entry to record the transfer of costs from finished goods to cost of goods sold is

Answer 1

Answer: Please refer to Explanation

Explanation:

The entry for the transfer of costs from finished goods to cost of goods sold is shown as follows,

DR Cost of goods sold $375,000

CR Finished goods. $375,000

As finished goods are transfered to the Costs of Goods, the account is CREDITED as an asset being reduced is credited. The Cost of Goods being another asset is increasing, thus it will be DEBITED.

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