Question

Luker Corporation uses a process costing system. The company had $162,500 of beginning Finished Goods Inventory on October 1. It transferred in $839,000 of units completed during the period. The ending Finished Goods Inventory balance on October 31 was $160,200. The entry to account for the cost of goods sold in October is:

Answer 1

Answer and Explanation:

The journal entry for cost of goods sold is as follows:

Cost of goods sold Dr $841,300

To Finished goods inventory $841,300

(Being the cost of goods sold is recorded)

The value of cost of goods sold is

= $162,500 + $839,000 - $160,200

= $841,300

Here the cost of goods sold is debited as it increased the expense while the finished goods inventory is credited as it decreased the assets