Question

On June​ 30, Coral, Inc. finished Job 750 with total job costs of $ 4 comma 400​, and transferred the costs to Finished Goods Inventory. On July​ 6, Coral sold goods to a customer for $ 5,800 cash. Which of the following is the correct journal entry to record the cost of goods​ sold? Assume the perpetual inventory system is used.
a. debit Finished Goods Inventory $4,100 and credit Cost of Goods Sold $4,100
b. debit Cost of Goods Sold $4,100 and credit Work-in-Process Inventory $4,100
c. debit Work-in-Process Inventory $4,100 and credit Cost of Goods $4,100
d. debit Cost of Goods Sold $4,100 and credit Finished Goods Inventory $4,100

Answer 1

Answer:

The correct option is D,debit Cost of Goods Sold $4,100 and credit Finished Goods Inventory $4,100

Explanation:

The total job costs is $4,100 not $4,400 ,which then means that the cost of goods sold is $4,100.

The appropriate entry for such sale is to credit merchandise inventory since the inventory reduces due to such sale being made while cost of goods sold is debited with the same amount.

In a nutshell, the correct option is D,