Completion and Sale of Product Journal Entries. Happy Tot Toy Company began business o January 1, 20x3. During the year, it incurred production costs of $700,000 and completed manufacture of toys costing $500,000. It sold toys costing $450,000 for $600,000.

a. Prepare journal entries as of December 31, 20x3, to record the transfer of completed toys to finished goods and to record the sales for the year.

b. Determine the balances of work-in-process inventory and finished goods inventory as of December 31, 20x3.