Gulick Company Developed the Following Data for the Current Year

question 114

Multiple Choice

Gulick Company developed the following data for the current year: $$\begin{array} { l l } \text { Beginning work in process inventory } & \$ 240,000 \\\text { Direct materials used } & 144,000 \\\text { Actual overhead } & 288,000 \\\text { Overhead applied } & 216,000 \\\text { Cost of goods manufactured } & 264,000 \\\text { Total manufacturing costs } & 720,000\end{array}$$ Gulick Company's ending work in process inventory is

• A)$696,000.
• B)$480,000.
• C)$456,000.
• D)$216,000.

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Definitions:

Prepaid Rent

The payment made for rent before it's due, recorded as an asset on the balance sheet until it's recognized as an expense in the period to which it relates.

Adjusting Entry

An entry made in the accounts to correct or allocate income and expenses to the appropriate accounting period.

Three Months Rent

An accounting entry typically categorized as a prepaid expense, representing payment for rent before it's due.

Closing Entry

Journal entries made at the end of an accounting period to transfer the balances of temporary accounts to a permanent equity account, thereby preparing the books for the next period.