Black Hills Manufacturing Has Two Processing Departments,Department I and Department

question 52

Multiple Choice

Black Hills Manufacturing has two processing departments,Department I and Department II.During the year,direct materials worth $38,000 purchased on account were assigned to Department I.At the end of the year,when the production cost report for Department I was prepared,Black Hills assigned $40,000 to the units transferred from Department I to Department II.The journal entry to record the transfer of units to Department II will ________.

• A) debit Work-in-Process Inventory-Department II for $38,000 and credit Work-in-Process Inventory-Department I for $38,000
• B) debit Work-in-Process Inventory-Department I for $40,000 and credit Work-in-Process Inventory-Department II for $40,000
• C) debit Work-in-Process Inventory-Department I for $38,000 and credit Work-in-Process Inventory-Department II for $38,000
• D) debit Work-in-Process Inventory-Department II for $40,000 and credit Work-in-Process Inventory-Department I for $40,000

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Definitions:

Underpriced Issues

Securities that are sold at a price below their market value, often leading to immediate profits for investors who purchase them during the issuance.

Green Shoe Provision

A clause in an underwriting agreement that allows underwriters to buy and sell additional shares than originally planned.

Protective Covenant

Part of the indenture limiting certain transactions that can be taken during the term of the loan, usually to protect the lender’s interest.

Preemptive Right Provision

A clause in a contract that gives existing shareholders the right to buy new shares before the company offers them to the public, in order to maintain their fractional ownership.