Question

Dazzle, Inc. produces beads for jewelry making use. The following information summarizes production operations and sales activities for June. The journal entry to record June sales is:

Direct materials used	$	82,000
Direct labor used	$	150,700
Predetermined overhead rate (based on direct labor)		120	%
Goods transferred to finished goods	$	452,000
Cost of goods sold	$	464,000
Credit sales	$	846,000

Multiple Choice

• Debit Accounts Receivable $846,000; credit Cost of Goods Sold $846,000.

• Debit Accounts Receivable $846,000; credit Sales $382,000; credit Finished Goods Inventory $464,000.

• Debit Cost of Goods Sold $464,000; credit Sales $464,000.

• Debit Finished Goods Inventory $464,000; debit Sales $846,000; credit Accounts Receivable $846,000; credit Cost of Goods Sold $464,000.

• Debit Accounts Receivable $846,000; credit Sales $846,000; debit Cost of Goods Sold $464,000; credit Finished Goods Inventory $464,000
  .

Answer 1

Solution :

The Answer is (e) Debit Accounts Receivable $846,000; credit Sales $846,000; debit Cost of Goods Sold $464,000; credit Finished Goods Inventory $464,000.

Remark : Since sales has been made on credit, acccount receivable will be debited and to record the revenue company will credit the sales account. for the sales, company will record the cost of goods sold. To record the cost, Cost of Goods Sold to be debited and inventory will be reduced by crediting finished goods inventory.

Please vote up and write your doubts in comment section. Would be glad to help you further.