2024 – Intellectual property assets are A depreciated B depleted C amortized D expensed Under
Ashford University Multiple Choice – 2024
Intellectual property assets are
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A. depreciated. |
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B. depleted. |
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C. amortized. |
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D. expensed. |
Under MACRS, the salvage value is
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A. added to the straight-line depreciation. |
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B. subtracted from the cost of the asset. |
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C. ignored. |
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D. added to the cost of the asset. |
Salvage value was ignored when originally calculating the units-of-production depreciation. This error would cause
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A. the period’s net income to be overstated. |
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B. the period’s net income to be understated. |
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C. the period end assets to be overstated. |
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D. None of the above |
Amortization of a patent was ignored. This error would cause
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A. the period’s net income to be overstated. |
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B. the period’s net income to be understated. |
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C. the period end assets to be understated. |
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D. None of the above |
The depreciation method that bases the expense on the level of use instead of the passage of time is the _______ method.
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A. units-of-production |
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B. straight-line |
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C. modified accelerated cost recovery |
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D. double-declining-balance |
According to the MACRS tax rate table, which of the following classes uses straight-line depreciation?
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A. Residential rental property |
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B. Automobiles |
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C. Railroad tracks |
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D. Race horses |
A coal mine was acquired for $2,000,000. No salvage value was expected, and the company expects to mine 2,000,000 tons of coal. During the first year, it mines and sells 220,000 tons of coal. The depletion expense is
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A. $2,220,000. |
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B. $2,000,000. |
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C. $220,000. |
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D. $24,200. |
The cost of a plant asset was increased for the payment of this year’s insurance premium. This error would cause
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A. the period’s net income to be overstated. |
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B. the period’s net income to be understated. |
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C. the period’s end assets to be understated. |
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D. None of the above |
An example of an intangible asset is
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A. a patent. |
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B. a building. |
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C. assembly cost. |
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D. land. |
Which of the following is an example of a land improvement?
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A. Shrubbery |
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B. Fence |
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C. Driveway |
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D. All of the above |
Using MACRS rates for a three-, five-, seven-, and ten-year property, what is the percentage for the depreciable rate?
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A. 200% |
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B. 150% |
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C. 125% |
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D. 100% |
The entry to record the cost of a property, plant, or equipment asset would include
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A. acquisition cost. |
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B. freight. |
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C. installation. |
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D. All of the above |
Which depreciation method is used to determine depreciation for income tax purposes?
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A. Straight-line |
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B. Double-declining balance |
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C. Units-of-production |
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D. MACRS |
The write-off of intangible assets is called
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A. depreciation. |
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B. depletion. |
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C. amortization. |
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D. deterioration |
Which of the following is a nondepreciable asset?
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A. Desk chairs |
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B. Land |
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C. Computer |
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D. Building |
A depreciation method that allocates depreciation of a plant asset based on the Tax Act of 1989 is the _______ method.
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A. straight-line |
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B. units-of-production |
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C. modified accelerated cost recovery |
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D. double-declining-balance |
The credit portion of the adjustment for the depletion of a coal mine was credited to the Coal Mine account. This error would cause
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A. the period’s net income to be overstated. |
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B. the period’s net income to be understated. |
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C. the period end assets to be overstated. |
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D. None of the above |
When calculating declining-balance depreciation, the straight-line rate was used instead of double the straight-line rate. In the first year of ownership, this error would cause
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A. the period’s depreciation expense to be overstated. |
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B. the period’s depreciation expense to be understated. |
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C. the period end assets to be understated. |
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D. None of the above |
The allocation of the cost of a natural resource is
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A. depreciation. |
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B. depletion. |
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C. amortization. |
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D. accrual. |
A company purchases a patent for $50,000. The patent will be amortized over five years. The entry to record the amortization in the first year is which of the following?
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A. Debit Patents $50,000; credit Cash $50,000 |
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B. Debit Amortization of Patents $10,000; credit Patents $10,000 |
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C. Debit Amortization of Patents $50,000; credit Patents $50,000 |
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D. Debit Patents $10,000; credit Amortization of Patents $10,000 |
Lumber used in construction of a building is part of
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A. raw material costs. |
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B. labor costs. |
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C. manufacturing overhead. |
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D. None of the above |
In a manufacturing company, the purchase of materials on account should be recorded as follows:
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A. Raw Materials Inventory Accounts Payable |
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B. Work-in-Process Inventory Accounts Payable |
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C. Finished Goods Inventory Accounts Payable |
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D. Accounts Payable Raw Materials Inventory |
The formula for cost of goods manufactured is
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A. raw materials plus direct labor minus overhead plus beginning work-in-process inventory plus ending work-in-process inventory. |
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B. raw materials minus direct labor plus overhead plus beginning work-in-process inventory plus ending work-in-process inventory. |
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C. beginning work-in-process plus total manufacturing cost minus ending work-in-process. |
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D. raw materials plus direct labor less overhead plus beginning work-in-process inventory less ending work-in-process inventory. |
Raw material inventory appears on the
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A. balance sheet. |
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B. income statement. |
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C. cost of goods manufactured statement. |
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D. Both a and c |
If direct labor for the month is $40,000, overhead is applied based on direct labor, annual overhead is $600,000, and annual direct labor is $1,000,000, what is the entry to charge direct labor to production?
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A. Debit Work-in-Process Inventory $40,000; credit Payroll $40,000 |
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B. Debit Overhead—Applied $40,000; credit Work-in-Process Inventory $40,000 |
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C. Debit Work-in-Process Inventory $24,000; credit Overhead—Applied $24,000 |
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D. Debit Work-in-Process Inventory $66,000; credit Overhead—Applied $66,000 |
Omega.com sold 25 jet skis for $7,000, which cost $5,000. The entry to record the sale would include a
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A. credit to Finished Goods Inventory for $5,000. |
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B. credit to Sales for $7,000. |
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C. debit to Cost of Goods Sold for $5,000. |
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D. All of the above |
During the week ending on November 30, total factory payroll incurred was $6,000. Of this total, 80% was for direct labor. The entry to record the payroll distribution would include which of the following?
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A. Debit Work-in-Process Inventory $4,800 and Overhead—Control $1,200 |
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B. Debit Work-in-Process Inventory $6,000 |
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C. Debit Work-in-Process Inventory $4,800 and Overhead—Applied $1,200 |
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D. Debit Work-in-Process Inventory $4,800 and Indirect Labor Expense $1,200 |
The statement of cost of goods manufactured includes
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A. direct labor costs. |
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B. raw material costs. |
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C. manufacturing overhead. |
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D. All of the above |
The entry for indirect materials (such as glue, etc.) requisitioned for use in production is which of the following?
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A. Raw Materials Inventory Work-in-Process Inventory |
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B. Work-in-Process Inventory Accounts Payable |
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C. Work-in-Process Inventory Raw Materials Inventory |
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D. None of the above |
What is the journal entry to record the direct labor summarized on the labor distribution report?
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A. Debit Finished Goods; credit Payroll |
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B. Debit Work-in-Process; credit Payroll |
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C. Debit Payroll; credit Direct Labor |
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D. Debit Payroll; credit Cash |
Factory Supplies Expense, Depreciation Expense—Factory, and Heat, Light, and Power—Factory appear on which section of the worksheet?
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A. Statement of cost of goods manufactured |
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B. Balance sheet |
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C. Income statement |
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D. Statement of cost of goods sold |
Candyland completed the manufacturing process. The entry to transfer the
product to finished goods is which of the following?
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A. Raw MaterialsInventory Finished Goods Inventory |
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B. Finished Goods Inventory Cost ofGoods Sold |
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C. Finished Goods Inventory Work-in-Process Inventory |
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D. FinishedGoods Inventory Raw Materials Inventory |
The entry to record rent expense of $9,000, supervision expense of $19,000, and depreciation expense of $7,000 to overhead is which of the following?
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A. Debit Overhead—Applied $35,000; credit Rent Expense $9,000; credit Supervision $19,000; credit Depreciation Expense $7,000 |
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B. Debit Overhead—Control $35,000; credit Rent Expense $9,000; credit Supervision $19,000; credit Depreciation Expense $7,000 |
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C. Debit Overhead—Applied $35,000; credit Overhead—Control $35,000 |
d. none of the above
Journal entries crediting Payroll and debiting Work-in-Process Inventory are made for
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A. administrative salaries. |
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B. hourly manufacturing labor. |
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C. foremen’s salaries. |
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D. raw materials. |
Manufacturing overhead includes all manufacturing costs,
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A. including raw materials. |
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B. including overhead. |
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C. excluding raw materials and direct labor. |
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D. None of the above |
The entry to record the requisition of supplies from the storeroom would include which of the following?
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A. Debit to Raw Materials; credit to Work-in-Process |
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B. Debit to Overhead—Applied; credit to Overhead—Control |
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C. Debit to Work-in-Process; credit to Overhead—Control |
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D. Debit to Overhead—Control; credit to Supplies Inventory |
Calculate the cost of goods sold when beginning finished goods inventory equals $70,000, ending finished goods inventory is $85,000, and cost of goods manufactured is $600,000.
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A. $615,000 |
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B. $445,000 |
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C. $685,000 |
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D. $585,000 |
What is the journal entry to record issuing raw materials from the storeroom?
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A. Debit Raw Materials Inventory; credit Work-in-Process |
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B. Debit Overhead—Control; credit Work-in-Process |
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C. Debit Work-in-Process; credit Overhead—Control |
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D. Debit Work-in-Process; credit Raw Materials Inventory |
What is the journal entry to record issuing supplies from the storeroom?
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A. Debit Overhead—Applied; credit Raw Materials Inventory |
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B. Debit Overhead—Control; credit Supplies Inventory |
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C. Debit Supplies Inventory; credit Overhead—Applied |
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D. Debit Overhead—Applied; credit Supplies Inventory |
If direct labor for the month is $80,000 and overhead is applied based on 75% of direct labor dollars, what is the entry to apply overhead?
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A. Debit Work-in-Process Inventory $80,000; credit Payroll $80,000 |
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B. Debit Overhead—Applied $60,000; credit Work-in-Process Inventory $60,000 |
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C. Debit Work-in-Process Inventory $60,000; credit Overhead—Applied $60,000 |
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D. Debit Work-in-Process Inventory $80,000; credit Overhead—Applied $80,000 |
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