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 total production costs of $375,000. The journal entry to record the transfer of costs from work in process to finished goods is a. Work in Process 540,000 Finished Goods 540,000 b. Finished Goods 375,000 Work in Process 375,000 c. Work in Process 375,000 Finished Goods 375,000 d. Finished Goods 540,000 Work in Process 540,000

Answer 1

Answer:

Option (b) is correct.

Explanation:

Given that,

Cost of production of completed and transferred goods during the period = $540,000

Cost of finished products shipped to customers = $375,000

The journal entry is as follows:

Finished goods accounts Dr. $540,000

       To work in process accounts      $540,000

(To record the transfer of costs from work in process to finished goods)