Question

S3-3 (book/static) Question Help Kirkland Furniture is a manufacturing plant that makes a variety of tables, benches, and other furniture. Indicate which inventory account(s) would be affected by the following actions that occur at Kirkland's in the process of manufacturing its standard picnic tables. Also indicate whether the inventory account would increase or decrease as a result of the action. (Leave any unused cells blank.) Raw Materials Inventory ork in Process Inventory Finishe Goods Inventory Action a. Lumber is delivered by the supplier to the plant, where it is stored in a materials storeroom until needed b. Lumber is requisitioned from the storeroom to be used for tops and seats for the tables C. Factory workers cut the lumber for the tables d. Five tables are completed and moved to the inventory storage area to await sale e. IA customer purchases a table and takes it home Choose from any drop-down list and then click Check Answer

Answer 1

	Action	Raw Materials inventory	Work I process Inventory	Finished Goods Inventory
a.	Lumber is delivered by the supplier to the plant, where it is stored in a materials storeroom until needed	Increases(since this is acquisiton of raw materials you will debit raw material inventory hence increase)
b.	Lumber is requisitioned from the storeroom to be used for tops and seats for the tables	Decrease(The entry will be Work in progress account Debit Raw material inventory credit hence raw material decreases WIP increases)	Increases
c.	Factory workers cut the lumber for he tables		Increases (Direct labor increases the WIP)
d.	Ten tables are completed and moved to the inventory storage area to await sale		Decreases(The entry will be Finished goods account Debit Work in Process inventory credit hence WIP decreases FG increases)	Increases
e.	A customer purchases a table and takes it home			Decreases (FG inventory decreases entry Is Cost of goods sold Debit Finished goods inventory credit)