One of the junior accountants from your auditing firm has reviewed your records and entries for inventory, direct costs, overhead accounts and cost of goods sold. Your company uses a job cost system and you have two departments: Machining Department and Assembly Department. All products pass through the Machining Department first, then to the Assembly Department. The Machining department includes the addition of materials, labor and overhead costs. The Assembly department only records labor and overhead costs, since no materials are added in the process. They have found two entries that they believe have been incorrectly recorded and should be corrected. Each department maintains separate inventory accounts. The entries they found and the description your company recorded were:

Assembly Department Inventory 10,000

Direct Materials 10,000

To record the use of materials during production.

Finished Goods 22,000

Machining Department Inventory 22,000

To record finished items

After reviewing this, what might be your response and if a correction is needed, what entry(ies) would be needed to make the correction? (no more than 5 sentences. Spelling and grammar errors will result in one point deducted for EACH error).