Kota Toy Corporation Manufactures Lizard Dolls in Two Departments, Molding

question 31

Multiple Choice

Kota Toy Corporation manufactures lizard dolls in two departments, Molding and Assembly. In the Molding Department, plastic is injected into a lizard-shaped mold. The dolls that come out of the molds are then transferred to the Assembly Department where hair is applied. Kota uses a weighted-average process cost system to collect costs in both departments.
On January 1, the Molding Department had 4,000 dolls in process. These dolls were 100% complete with respect to direct materials and 70% complete with respect to conversion cost. During January, Molding completed 79,000 dolls. On January 31, Molding had 7,000 dolls in work in process. These dolls were 100% complete with respect to direct materials and 25% complete with respect to conversion cost.
-What account would Kota debit to record the transfer of dolls out of the Molding Department?

• A) Work in Process -- Assembly
• B) Finished Goods
• C) Manufacturing Overhead
• D) Work in Process -- Molding

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Definitions:

Liabilities

Obligations of a monetary nature that an organization must fulfill to others, involving the exchange of economic values over an established timeframe.

Assets

Resources owned by a company that have economic value and can be used to meet debts, commitments, or investments.

Stockholder's Equity

Refers to the ownership interest of shareholders in a corporation, calculated as the company's total assets minus its total liabilities.

Fiscal Year

A one-year period that companies and governments use for accounting and financial reporting, which may or may not align with the calendar year.