Black Hills Manufacturing has two processing departments,Department I and Department II.During the year,direct materials worth $38,000 purchased on account were assigned to Department I.At the end of the year,when the production cost report for Department I was prepared,Black Hills assigned $40,000 to the units transferred from Department I to Department II.The journal entry to record the transfer of units to Department II will ________.
A) debit Work-in-Process Inventory-Department II for $38,000 and credit Work-in-Process Inventory-Department I for $38,000
B) debit Work-in-Process Inventory-Department I for $40,000 and credit Work-in-Process Inventory-Department II for $40,000
C) debit Work-in-Process Inventory-Department I for $38,000 and credit Work-in-Process Inventory-Department II for $38,000
D) debit Work-in-Process Inventory-Department II for $40,000 and credit Work-in-Process Inventory-Department I for $40,000

Question

Quizplus · Accepted Answer

The correct journal entry to record the transfer of units from Department I to Department II involves debiting Work-in-Process Inventory-Department II and crediting Work-in-Process Inventory-Department I for the amount assigned to the units transferred, which is $40,000. This reflects the cost assigned to the units upon their transfer, not the original direct materials cost.

Black Hills Manufacturing Has Two Processing Departments,Department I and Department