O'Hare Company,is a manufacturing firm that uses a job-order cost system to determine the costs of its products.O'Hare Company sold job #132,that cost $5,900 to manufacture,for $8,200 cash.The job cost sheet for that job reported total manufacturing costs of $5,900.The recognition of this event on the financial statements would include a(n):

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Recognizing revenue from the sale of inventory is an asset source event.Assets (Cash)and stockholders' equity (Retained Earnings)both increase by $8,200,as do revenue and net income reported on the income statement.Recognizing cost of goods sold is an asset use transaction.Assets (Finished Goods Inventory)and stockholders' equity (Retained Earnings)both decrease by $5,900.The increase in the expense,cost of goods sold,decreases net income.Considering both parts of this transaction,the net effect of this event is to increase assets,total equity,and net income by $2,300 (= Sales of $8,200 - Cost of goods sold of $5,900).

O'Hare Company,is a Manufacturing Firm That Uses a Job-Order Cost