The journal entry to transfer the completed Jefferson Apartments project to Canfield's finished goods inventory would include:
A)A debit to the Finished Goods Inventory account of $975,000.
B)A debit to the Finished Goods Inventory account of $2,625,000.
C)A debit to the Finished Goods Inventory account of $1,650,000.
D)A credit to the Work in Process Inventory account of $2,175,000.

Question

Quizplus · Accepted Answer

DThe correct journal entry to transfer the completed project to finished goods inventory involves debiting the Finished Goods Inventory account for the total cost of the project and crediting the Work in Process Inventory account for the same amount. Choice B correctly states the amount to be debited to Finished Goods Inventory ($2,625,000), indicating the total cost of the completed project. Choice D, although it mentions a credit to the Work in Process Inventory account, specifies an incorrect amount ($2,175,000) and is included due to a misunderstanding in the instruction format. The correct credit should also be $2,625,000 to match the debit to Finished Goods Inventory, but since no such option is provided, B is the best answer for the action described.

The Journal Entry to Transfer the Completed Jefferson Apartments Project