Question

Luker Corporation uses a process costing system. The company had $171,500 of beginning Finished Goods Inventory on October 1. It transferred in $848,000 of units completed during the period. The ending Finished Goods Inventory balance on October 31 was $169,200. The entry to account for the cost of goods sold in October is:

Answer 1

Dr. Cost of goods Sold $850,300

Cr. Finished goods Inventory $850,300

Step-by-step explanation:

Goods available to sale is the sum to Beginning Inventory and the production / Purchases for the period.

Finished goods Available for sale = Beginning Inventory of Finished goods + Production in the period

Finished goods Available for sale = $171,500 + $848,000 = $1,019,500

Cost of Goods sold is the cost of the unit sold which is incurred to produce / purchase that products. It is calculated by deducting the ending inventory from goods available to sale.

Cost of finished goods sold = Finished goods Available for sale - Ending Inventory of finished goods = $1,019,500 - $169,200 = $850,300