Question

XYZ is dedicated to the manufacture of fans. Below are some of the accounts of the largest general of XYZ companies.

A) Inventory of materials

DR CR
Initial Balance 10,000
(a) 5,000 (b) 2,000

Final Balance 13,000

B) Inventory of Goods in Process

DR CR
Initial Balance 3,000
(b) 2,000 (e) 4,000
(c) 4,500
(d) 1,700
Final Balance 7,200

C) Inventory of Finished goods

DR CR
Initial Balance 6,000
(e) 4,000 (f) 3,000

Final Balance 7,000

D) Wages Payable

DR CR
  
(c) 4,500

Briefly describe the transactions that best describe the events from (b) to (f).

Example, transaction (a): Materials were purchased at a cost of $ 5,000

Answer 1

B.

b) Materials costing $2,000 is introduced to production

c) Materials costing $4,500 is introduced to production

d) Materials costing $1,700 is introduced to production

e) Materials costing $4,000 is completed as finished goods

Explanation:

C.

Initial balance + Production - Completed as finished goods = Final balance

3000 + 2000 + 4500 + 1700 - 4000 = 7200

e) Goods costing $4,000 is received from work in progress

f) Goods costing $4,000 is sold

Explanation:

Initial balance + Received from work in progress - Sold= Final balance

6000 + 4000 - 3000 = 7000

D.

c) Wages expense of $4,500 is outstanding to be paid