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### Horngren'S Financial And Managerial Accounting

Book edition 6th
Author(s) Tracie L. Miller-Nobles, Brenda L. Mattison
Pages 992 pages
ISBN 9780134486833

# Question: Department 1 is transferring units that cost $40,000 to Department 2. Give the journal entry. Answer  Date Particulars Debit ($) Credit (\$) Work in process inventory-Department 2 40,000 Work in process inventory-Department 1 40,000
See the step by step solution

## Step 1: WIP inventory

The work in process inventory is defined as the inventory which are not fully completed and are not ready for sale. It is considered as the current asset in the company’s balance sheet.

## Step 2: Transfer entry of units from one department to another department

While manufacturing the products, when the units are transferred to another department for processing, the work in process inventory of the department transferring the units is credited and the work in process inventory of the receiving department is debited.