 In this presentation, we will enter a journal entry to record finished jobs moving those finished jobs from the work in process account to the finished jobs inventory finished goods inventory account. Recall what we have done so far is record the processing and the production of our inventory. Most of that happening in the account called work in process that work in process account, this one number in work in process being supported by jobs. So this one number needs to be supported in a similar way as the accounts receivable. The accounts receivable having a GL account by date, but also needing a subsidiary account by customer to know who owes this money. The work in process also has a GL account by date, but we also need to know this work in process by job. So as we recorded costs that are going to be applied to inventory, we either applied them to the work in process directly if we knew which job it was going to, such as the direct materials and the direct labor, or we had to allocate it to the jobs after first recording it into the bucket of overhead, then using a predetermined overhead rate to allocate the overhead to the actual jobs. What we're showing here is going to be a bit of a condensed job cost sheet. So we have like these a condensed job cost sheets job be 15, be 16, be 17, have here be 18 and be 19. They all have the three major components that we've got the direct materials, direct labor and factory overhead. And if we add those up, these three components for each job, we will get to the totals here the total for each job. So this is the cost of each job as we've go that this is the cost so far. Now, when all those jobs are open, then as they have been so far, we're going to say that they're all in work in process, we don't have anything in finished goods so far. And so all of these jobs at the start of here, we're open jobs, they're all going to be comprised of or put together to come up to the 13150. In other words, if we add up these jobs, we're going to say the total job cost is 3820 plus 2790, which is this item, plus 2024 plus job B17, which is 2126 and job B18, which is 2390. That's going to give us our 13150. So that's the case when they're all open. Now, there's three basic ways a job can be. It could be open and we're still working on it, which means it's going to be in work in process, or it can be closed because we're done with it. So I'm going to call that a closed job, a finished job, a completed job. However, we want to phrase that. We're going to say it's completed. And therefore it needs to move from the open job to the completed jobs. And we're going to say that these three in blue here are those that have moved. We're going to say they still have a job cost sheet. The job cost sheet looks much the same, but it's done. We're no longer working on it. We're no longer adding more material, labor, and overhead costs to it because it has been completed. Whereas these two jobs B18 and B19 are still open. So what we need to do then is make a journal entry for that transaction to move this to here. The journal entry is pretty straightforward because these are two inventory accounts, we just need to move this to here. But we need to be able to support that by the job sheets. And that's what that's what gets a little bit tricky, because we're going to be using these job sheets to back up and support both the work in process and the finished goods. So the journal entry, according to the numbers we have here, we're going to say, okay, these three blue jobs, we're going to move. So that's going to be the 3820 plus the 2126 plus the 2790. So that's going to be these three items here. And we're going to move those out. And we're going to put those into finished goods. So let's do that now with a journal entry. Before we do, however, just want to remind us of what the full job cost sheets that we've been looking at have looked like. So we're kind of simplifying these job cost sheets here to give us a simple worksheet to work with job cost sheet that we have been looking at might be more detailed depending on what types of job cost systems we're running. But they have the three components, direct materials, direct labor and overhead. And again, we might be applying that direct labor out with the requisition forms and the time tickets and a time and tying that information out. But in essence, of course, we're going to end up with total direct materials, total direct labor and overhead, those being our jobs. And then we're going to pick those jobs as we did here. See, we only have basically the totals in this little worksheet. We'll take the totals here, pick the jobs that are open the jobs that as they close and allocate them out in this process. So here we've done this, we're going to we're going to say remember that our amount is 8745 for these three blue jobs that we're going to move out. And then the journal entry is pretty straightforward. We're just going to take them out of work and process. This is a debit balance account, we need to make it go down. And therefore we'll do the opposite thing to it a credit. And we're going to put it into the finished goods inventory. This is also another inventory which is an asset balance account. It needs to go up. So we're going to do the same thing to it as its normal balance, which is a debit. So we're going to go ahead and debit the finished goods inventory for that 8736 the sum of these three jobs. And then we're going to credit the work and process for that eight thousand seven 36 just moving that number from here to here. Again, the difficult part being us making sure that we have the correct supporting documentation with the jobs to support both the work and process now and the finished goods accounts. So we're going to post this now to the general ledger. So here's our finished goods, we're going to post this out, it's going to go from zero up by 8736 to 8736. That then is found here in our trial balance. So here's our ending trial balance so far. And then we have our work and process, we're going to credit it. So it was at 13150. We're going to credit it by that 8736 moving it out and down to 4000 for 114. And that of course is the amount we see here on the trial balance. So now we just broke this number up between, in essence, those two breaking out the ones that are finished goods based on the jobs that had now been completed. So if we look at our end product now, we see the job cost system is now supporting these two numbers. And just to verify that we we said that the blue numbers are now the finished jobs, which once again is the 3820 plus the 2790 plus the 2126. That's going to be this number, this number in this number adds up to this 8736. And the jobs that still remain open then are also supported by these two numbers 2390 and the 2024. So that's going to be these two open jobs. And that's going to be represented by the work and process account here. So now both of these accounts are being supported by our job cost sheets. The next step, of course, is that we're going to sell some of these. And that step will be similar to a merchandising company in that we'll finally have these finished goods inventory, you can think of these jobs as basically finished goods like inventory, this is the cost of them now in finished goods. And we can just when we sell them have the normal journal entry. And we'll see that next time. Just to note, however, when we do sell it, we often forget about and get confused in the sales half of the journal entry and the cost of goods sold, because we've been focusing so much on the cost that we're actually focusing in when we sell it on the cost of goods sold component, the sales component, everything we're tracking here has nothing to do with sales yet. We may use the job cost sheet for sales. But these job costs sheets don't have anything to do with sales. And therefore, they're not related directly. So in other words, we may, for example, use our job cost sheet as our construction of our invoice and say our invoice, look, we had this much in direct materials this much in direct labor this much in overhead. And we may tell our customers that we have a like a 30 or 40% markup and say that the sales price then would be 23902390 times a 30% markup point three plus the 2390 and charge then 3107. That's one way we could construct the invoice. But it doesn't necessarily have to be constructed that way. And when we do the journal entry, there's two sides to it, there's going to be debiting accounts receivable or cash and crediting sales that side having nothing to do directly with these numbers. And the other side being debiting cost of goods sold, crediting the inventory in our case, finished goods inventory. That that journal entry should look familiar if you've worked with merchandising companies. But again, since we haven't been looking at that journal entry the whole time and have only been focusing in on cost and not revenue side of things, we can get confused on that journal entry. So that's what we'll do next time.