Fun Stuff Manufacturing produces frisbees using a three-step sequential process that includes molding, coloring and finishing. When the frisbees and associated costs are transferred out of the coloring process and into the finishing process, the journal entry would include a

Question

Quizplus · Accepted Answer

The transfer of frisbees and associated costs from the coloring process to the finishing process indicates the completion of coloring process and the beginning of finishing process. Therefore, the journal entry should reflect a debit to WIP inventory-finishing and a credit to WIP inventory-coloring. Choice A is incorrect because it reflects a credit to WIP-finishing, which is incorrect. Choice B is incorrect because it reflects a transfer to Finished Goods inventory, but the frisbees are not yet completed, as they are still in the finishing process. Choice D is incorrect because it reflects a credit to Finished Goods inventory, which is incorrect.

Fun Stuff Manufacturing Produces Frisbees Using a Three-Step Sequential Process