Dentlinger Company uses a job-order cost system and had the following data available for 20X2.

-The journal entry to record the sale of all jobs would include a
A) debit to Finished Goods Inventory for $584,000.
B) credit to WIP Inventory for $512,000.
C) credit to Finished Goods Inventory for $512,000.
D) credit to Cost of Goods Sold for $584,000.

Question

Dentlinger Company uses a job-order cost system and had the following data available for 20X2.
 
-The journal entry to record the sale of all jobs would include a
A) debit to Finished Goods Inventory for $584,000. 
B) credit to WIP Inventory for $512,000. 
C) credit to Finished Goods Inventory for $512,000. 
D) credit to Cost of Goods Sold for $584,000.

Quizplus · Accepted Answer

When all jobs are sold, the cost of goods manufactured (which is the sum of the cost incurred on all jobs completed during the year) will be transferred from Work in Process Inventory to Finished Goods Inventory. Thus, the appropriate journal entry would be a credit to WIP Inventory and a debit to Finished Goods Inventory for the total cost of goods manufactured during the year, which is $512,000.

Dentlinger Company Uses a Job-Order Cost System and Had the Following