Arizaga Corporation manufactures canoes in two departments, Fabrication and
Waterproofing. In the Fabrication Department, fiberglass panels are attached to a canoe-
shaped aluminum frame. The canoes are then transferred to the Waterproofing
department to be coated with sealant. Arizaga uses a weighted-average process cost
system to collect costs in both departments.
All materials in the Fabrication Department are added at the beginning of the production
process. On July 1, the Fabrication Department had 320 canoes in process that were 20%
complete with respect to conversion cost. On July 31, Fabrication had 540 canoes in
process that were 30% complete with respect to conversion cost. During July, the
Fabrication Department completed 6,700 canoes and transferred them to the
Waterproofing Department.
What journal entry should Arizaga make to record the completion of the production
process by the Waterproofing Department?