Accounting – 5.5 Manufacturing accounts | e-Consult

Journal Entry:

| Date | Account | Debit (£) | Credit (£) |

|------------|------------------------------------------|-----------|------------|

| [Date] | Work in Progress | £10,000 | |

| | Direct Materials | £5,000 | |

| | Direct Labour | £3,000 | |

| | Manufacturing Overhead | £2,000 | |

| | Customer Accounts Receivable | | £10,000 |

Explanation of Work in Progress Account Effect:

The Work in Progress account is affected as follows:

• Debit (Decrease): The Work in Progress account is debited by £10,000. This reflects the total cost of the job that has been completed and transferred to finished goods. The balance of the Work in Progress account is reduced by the total cost of the job.

Therefore, the Work in Progress account is debited by £10,000 to reflect the completion of the job and the transfer of the finished goods to the customer.