Assume That the Following Events Occurred at a Division of Advanced

question 15

Essay

Assume that the following events occurred at a division of Advanced Enterprises for the current year.
(1) Purchased $450,000 in direct materials.
(2) Incurred direct labor costs of $260,000.
(3) Determined that manufacturing overhead was $410,000.
(4) Transferred 70% of the materials purchased to Work-in-Process Inventory.
(5) Completed work on 65% of the work in process. Costs assigned equally across all work-in-process.
(6) The inventory accounts have no beginning balances.
Required:
Compute the following amounts in the Work-in-Process Inventory account:
(a) Transfers-in (TI).
(b) Transfers-out (TO).
(c) Ending balance (EB).

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Definitions:

Adjusting Entry

A journal entry made in accounting records at the end of an accounting period to allocate income and expenditures to the period in which they actually occurred.

Prepaid Insurance

An asset account that represents insurance payments made in advance for future coverage periods.

Insurance Premium

The amount of money an individual or business must pay for an insurance policy, which provides financial protection or reimbursement against losses.

Adjusting Entry

Log entries drafted at the final phase of a financial period to attribute income and expenses to the period in which they were truly incurred.