Betty Company Uses a Job- Order- Cost System and Had

question 140

Multiple Choice

Betty Company uses a job- order- cost system and had the following data available: $\begin{array}{ll}\text { Beginning dir ect - materials inventory } & \$ 26,000 \\\text { Beginning WIP inventory } & 64,000 \\\text { Beginning fini shed-goods inventory } & 58,000 \\\text { Direct material s purchased on account } & 148,000 \\\text { Direct materials requisitioned } & 82,000\\\text { Direct-lab or cost incurred } & 130,000 \\\text { Factory overhead incurred } & 146,000 \\\text { Cost of goods completed } & 292,000 \\\text { Cost of goods sold } & 256,000 \\\text { Overhead application rate } & 125 \%\end{array}$ (as a percent of direct- labor cost) The journal entry to record the sale of all jobs would include a:

• A) debit to Finished- Goods Inventory for $292,000
• B) credit to Cost of Goods Sold for $292,000
• C) credit to WIP Inventory for $256,000
• D) credit to Finished- Goods Inventory for $256,000

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Definitions:

Common Stock

A type of equity security that represents ownership in a corporation, entitling holders to vote on corporate matters and typically to receive dividends.

Fair Value

The estimated market price of an asset or liability, based on current market conditions and arm’s length transactions, used for financial reporting purposes.

Equipment

Tangible property used in operations, such as machinery and computers.

Consolidated Balance Sheet

A financial statement showing the financial position of a parent company and its subsidiaries as if they were a single entity.