Problem 6-14 Equivalent Units; Costing of Inventories; Journal EntriesWeighted-Average Method [LO1, LO2, LO3, LO4]

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 companys 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 companys 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

Required:

1. Determine the equivalent units and the costs per equivalent unit for materials and conversion for the year. (Round your "Cost per equivalent unit" answers to 2 decimal places.)

2. Determine the amount of cost that should be assigned to the ending work in process and finished goods inventories.

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. (Round intermediate calculations to 2 decimal places.)