Assume that Test Company uses backflush costing with two trigger points: the purchase of raw materials and the sale of goods. The journal entry to record the issue of direct materials to production would include

No entry would be required

A debit to finished goods inventory for $200,000

A debit to raw materials and in-process inventory for $200,000

A debit to cost of goods sold for $200,000

Assume that Test Company uses backflush costing with one trigger point: the sale of goods. The journal entry to record the sale of goods would include

		A credit to accounts payable for $200,000
		A credit to wages payable for $160,000
		A credit to finished goods inventory for $550,000
		No entry would be required

Assume that Test Company uses backflush costing with one trigger point: the completion of goods. The journal entry to record the completion of the goods would include

		A credit to wages payable for $160,000
		A credit to accounts payable for $200,000
		No entry would be required
		A credit to raw materials and in-process inventory for $550,000

Test Company had the following transactions during December. - Purchased raw materials on account for $200,000 - Issued all materials purchased into production - Incurred actual direct labor cost of \$160,000 - Incurred actual overhead costs of $180,000 - Applied conversion costs of $350,000 (\$160,000 of direct labor; $190,000 of overhead) - Completed all units in process - Sold all completed units at a price equal to cost plus 20%