Assume that Four Company uses backflush costing with two trigger points: the purchase of raw materials and the sale of goods.

The journal entry to record the purchase of raw materials would include

No entry would be required

A debit to cost of goods sold for $250,000

A debit to finished goods inventory for $250,000

A debit to raw materials and in-process inventory for $250,000

Assume that Four Company uses backflush costing with two trigger points: the purchase of raw materials and the sale of goods.

The journal entry to record the direct labor cost incurred would include

		A debit to raw materials and in-process inventory for $180,000
		No entry would be required
		A debit to conversion cost control for $180,000
		A debit to finished goods inventory for $180,000

The journal entry to record the completion of the goods would include

A debit to finished goods inventory for $660,000

A credit to raw materials and in-process inventory for $250,000

A credit to accounts payable for $250,000

No entry would be required

Assume that Four Company uses backflush costing with two trigger points: the purchase of raw materials and the sale of goods.

The journal entry to record the sale of the goods would include

		A credit to finished goods inventory for $660,000
		A credit to conversion cost control for $410,000
		A credit to accounts payable for $250,000
		No entry would be required

- Purchased raw materials on account for $250,000 - Issued all materials purchased into production - Incurred actual direct labor cost of $180,000 - Incurred actual overhead costs of $220,000 - Applied conversion costs of $410,000 (\$180,000 of direct labor; $230,000 of overhead) - Completed all units in process - Sold all completed units at a price equal to cost plus 15% There were no changes to beginning or ending inventories for the month