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The MagnoliaCorporationhas a cycle time of 1.5 days, uses a Raw and In-Process (RIP)
inventory account and expenses all conversion costs to the cost of goods sold account. At
the end of each month, all inventories are counted, their conversion cost components are
estimated, and inventory account balances are adjusted accordingly. Raw material cost is
backflushed from RIP to Finished Goods. The following information is for the month of
June:
Journal Entries
Accounts Debit Credit
1. Raw and In Process 444,000
Accounts Payable 444,000
2. Finished Goods 443,000
Raw and In Process 443,000