Embark produces mulch for landscaping use. The following information summarizes

Question

Embark produces mulch for landscaping use. The following information summarizes production operations for June. The journal entry to record June production activities for goods transfer from production to finished goods is: Direct materials - $87,000.00 Direct labor used - $160,000.00 Predetermined overhead rate - 155% Goods transferred to finished goods - $432,000.00 COGS - $444,000.00 Credit Sales - $810,000.00 A. Debit Finished Goods Inventory $432,000; credit Goods in Process Inventory $432,000. B. Debit Goods in Process Inventory $444,000; credit Finished Goods Inventory $444,000. C. Debit Goods in Process Inventory $432,000; credit Finished Goods Inventory $432,000. D. Debit Finished Goods Inventory $444,000; credit Goods in Process Inventory $444,000. E. Debit Goods in Process Inventory $432,000; credit Cash $432,000.

Explanation / Answer

Debit Accounts Receivable $810,000; credit Cost of Goods Sold $810,000. Debit Accounts Receivable $810,000; credit Sales $366,000; credit Finished Goods Inventory $444,000. Debit Cost of Goods Sold $444,000; credit Sales $444,000. Debit Finished Goods Inventory $444,000; debit Sales $810,000; credit Accounts Receivable $810,000; credit Cost of Goods Sold $444,000. Debit Accounts Receivable $810,000; credit Sales $810,000; debit Cost of Goods Sold $444,000; credit Finished Goods Inventory $444,000.

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