Question

Hornsby has a single production department, and uses a process-costing system. The balance in its Work-in-Process account on January 1 was $68,000. The account was charged with direct materials, direct labor, and manufacturing overhead of $450,000 throughout the year. If a review of the accounting records determined that $86,000 of goods were still in production at year-end, Hornsby should make a journal entry on December 31 that includes:

Answer 1

Step-by-step explanation:

The journal entry is shown below:

Finished goods Inventory A/c Dr $432,000

To Work in process inventory A/c $432,000

(Being the finished goods inventory is shown below)

The computation is shown below:

= Beginning work in progress + direct materials, direct labor, and manufacturing overhead charged - ending work in progress

= $68,000 + $450,000 - $86,000

= $432,000