Powderhouse,Inc

question 14

Essay

Powderhouse,Inc.has two processes-Coloring Department and Mixing Department.The company sold 2,000 gallons of paint for $220,000,of which $150,000 was sold on account.The total cost of processing was $385,000 for 5,500 gallons of paint.What are the journal entries to record a sale if the company follows a process costing system?

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Definitions:

Discharge by Performance

The termination of a contractual obligation when both parties fulfill their respective duties as agreed in the contract.

Discharged

The state of being released from a legal, financial, or other obligation.

Substantially Performed

A legal concept indicating that a contract has been fulfilled enough to meet its essential requirements, despite minor variances from the exact terms.

Concurrent Conditions

In a contract, terms under which each party’s performance is conditioned on the performance of the other; occur only when the parties are required to perform for each other simultaneously.