Suppose Smith Started 100,000 Units During the Period, Transfers 75,000

question 1

Multiple Choice

Suppose Smith started 100,000 units during the period, transfers 75,000 units to finished goods and estimates that 25,000 units still in process are only 20 percent complete.What is the number of equivalent units in WIP inventory at the end of the period?

• A)20,000
• B)5,000
• C)15,000
• D)60,000
• E)80,000

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Definitions:

Retained Earnings

The portion of net income left over after dividends are paid out to shareholders, reinvested into the company's operations.

Closing Entries

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

Total Revenues

The total amount of income generated by a business from its normal business operations, including sales of goods or services, before any expenses are deducted.

Income Summary

An account used in the closing process during the accounting cycle that summarizes the results of operations—revenues and expenses—before transferring the net income or loss to the owner's equity.