Answer the following question(s)using the information below.
Walton Industries uses backflush costing.For March,there were no beginning inventories of direct materials and no beginning or ending work-in-process.Conversion costs is the only indirect manufacturing cost category currently used.Journal entries are recorded when actual costs are incurred,at completion of finished goods,and at sale of finished goods,under backflush costing.

-Which of the following journal entries properly records the purchase of direct materials at Walton Industries?

Question

Answer the following question(s)using the information below.
Walton Industries uses backflush costing.For March,there were no beginning inventories of direct materials and no beginning or ending work-in-process.Conversion costs is the only indirect manufacturing cost category currently used.Journal entries are recorded when actual costs are incurred,at completion of finished goods,and at sale of finished goods,under backflush costing.
 
-Which of the following journal entries properly records the purchase of direct materials at Walton Industries?

Quizplus · Accepted Answer

Journal entry B properly records the purchase of direct materials because under backflush costing, journal entries are only recorded when actual costs are incurred. Direct materials are recorded as a cost of goods sold when the finished goods are completed, which is after the direct materials have been used in production. Therefore, option B correctly records the purchase of direct materials when they are received and before they are used in the production process.

Answer the Following Question(s)using the Information Below