Answer:
Dr Factory Overhead Payable $5,000
Cr Cost of Goods Sold $5,000
Explanation:
What we have done?
Cr Factory Overhead $5000
What we must do?
Dr Factory Overhead $5000
The entry in the expense account is credited, as said in the question. So what we must do is debit it back and waive off its affect from the cost of sales.
So at the end of the period the company is legally required to close the expenses and revenue accounts in-accordance to International Financial Reporting Standards.
What must be the entry?
So the journal entry would be :
Dr Factory Overhead $5,000
Cr Cost of Goods Sold $5,000
