Sew Lovely is a company that manufactures high-end silk scarves. These scarves are offered in several uniquely designed patterns that change seasonally. The head accountant is looking at the numbers for the month of August and is focused on the movement between the dying and sewing departments. He has compiled the following information about the dying department:
August 1 Work-in-Progress (WIP) Inventory (Dying): $703
Added Silk: $6,404
Conversion Costs (CC): $8,200
August 31 WIP Inventory (Dying): $4,302
According to this information, what journal entry would Sew Lovely use to recognize the transfer of costs from the Dying to the Sewing department?

Question

Quizplus · Accepted Answer

In order to solve for this, envision a T-Account. All of the numbers provided should be debits to the WIP Inventory-Dying account. Solve for a credit. This question requires use of the following formula:
 11ee941a_b6e5_86a0_bdb6_af4123f01065_TBW1041_00 $703 + $6,404 + $8,200 - X = $4,302
X = $11,005
This will involve a debit to WIP Inventory-Sewing and a credit to WIP Inventory-Dying, both in the amount of $11,005.

Sew Lovely Is a Company That Manufactures High-End Silk Scarves