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20 September, 07:27

Clemens Cars's job cost sheet for Job A40 shows that the cost to add security features to a car was $11,000. The car was delivered to the customer, who paid $15,700 in cash for the added features. What journal entries should Clemens record for the completion and delivery of Job A40?

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  1. 20 September, 10:05
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    Clemens Cars's Journal entry

    1.

    Dr Finished goods inventory $11,000

    Cr Work in process inventory $11,000

    2.

    Dr Cost of goods sold $11,000

    Cr Finished goods inventory $11,000

    3.

    Dr Cash $15,700

    Cr Sales revenue $15,700

    Explanation:

    Based on the information given above in which Clemens Cars's job cost sheet shows that the cost to add security features to a car was $11,000 which means we have to record cost of completed jobs to FG by Debiting Finished goods inventory with $11,000 and Crediting Work in process inventory with the same amount and as well record cost of goods sold by debiting Cost of goods sold with $11,000 and crediting Finished goods inventory with the same amount.

    Since the car was delivered to the customer, who paid $15,700 in cash for the added features which means we have to record sale price of job by Debiting Cash with $15,700 and Crediting Sales revenue with the same amount.
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