Question

Tambin Inc. produces a gasoline additive that, when added to the gas tank of the average automobile, is designed to increase gas mileage by 15%. The company’s controller suspects that the year-end dollar balances shown below in the inventory accounts may be incorrect.      Units Costs   Work in process, December 31 (materials 100% complete;        conversion 50% complete) 45,000 $ 80,000     Finished goods, December 31 50,000 $ 133,500      There were no finished goods inventories at the beginning of the year. The company uses the weighted-average method of process costing. There is only one processing department.   A review of the company’s inventory and cost records shows the following:      Costs    Units Materials Conversion   Work in process, beginning of year (materials 100% complete;         conversion 80% complete) 40,000 $ 42,000 $ 68,000     Started into production 620,000     Costs added during the year $ 770,000 $ 2,200,000     Units completed during the year 880,000     3. Prepare the necessary correcting journal entry to adjust the work in process and finished goods inventories to the correct balances as of December 31