Orlando Company placed $142 of raw materials into production. How would this transaction affect the company's financial statements? $$\begin{array} { | c | c | c | c | c | c | c | c | c | c | }
\hline { \text { Assets } } & = & \text { Liab. } & + & \text { Equity } & \text { Rev. } & - & \text { Exp. } & = & \text { Net Inc. } \
\hline \begin{array} { c }
\text { Raw } \
\text { Matls. } \
\text { Inv. }
\end{array} & + & \text { WIP Inv. } & & & & & & \
\hline
\end{array}$$

Question

Orlando Company placed $142 of raw materials into production. How would this transaction affect the company's financial statements? $$\begin{array} { | c | c | c | c | c | c | c | c | c | c | } 
\hline { \text { Assets } } & = & \text { Liab. } & + & \text { Equity } & \text { Rev. } & - & \text { Exp. } & = & \text { Net Inc. } \
\hline \begin{array} { c } 
\text { Raw } \
\text { Matls. } \
\text { Inv. }
\end{array} & + & \text { WIP Inv. } & & & & & &  \
\hline
\end{array}$$

Quizplus · Accepted Answer

The transaction involves moving raw materials into work-in-progress inventory, which decreases raw materials inventory and increases work-in-progress inventory, both of which are asset accounts. There is no effect on liabilities, equity, revenue, expenses, or net income at this stage.

Orlando Company Placed $142 of Raw Materials into Production A)