Blackstone Incorporated had the following selected account balances at the end of 2014: Work in process $200,000 Finished goods 150,000 Cost of goods sold 250,000 Factory overhead (overapplied) 18,000 Amount of factory overhead applied in 2014 200,000 Required: a. Give the journal entry to record the factory overhead applied. b. What was the actual overhead for the year? c. Give the journal entry to dispose of the factory overhead balance assuming it is written off to the cost of goods sold. d. Give the journal entry to dispose of the factory overhead balance assuming it is allocated among work in process, finished goods, and cost of goods sold based on ending balances. e. Which method of disposing of under- or overapplied factory overhead cost is more accurate? Explain.

Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter4: Accounting For Factory Overhead
Section: Chapter Questions
Problem 15E: The books of Petry Products Co. revealed that the following general journal entry had been made at...
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Blackstone Incorporated had the following selected account balances at the end of 2014:
Work in process $200,000
Finished goods 150,000
Cost of goods sold 250,000
Factory overhead (overapplied) 18,000
Amount of factory overhead applied in 2014 200,000
Required:
a. Give the journal entry to record the factory overhead applied.
b. What was the actual overhead for the year?
c. Give the journal entry to dispose of the factory overhead balance assuming it is written off to the cost of goods sold.
d. Give the journal entry to dispose of the factory overhead balance assuming it is allocated among work in process, finished
goods, and cost of goods sold based on ending balances.
e. Which method of disposing of under- or overapplied factory overhead cost is more accurate? Explain.
Transcribed Image Text:Blackstone Incorporated had the following selected account balances at the end of 2014: Work in process $200,000 Finished goods 150,000 Cost of goods sold 250,000 Factory overhead (overapplied) 18,000 Amount of factory overhead applied in 2014 200,000 Required: a. Give the journal entry to record the factory overhead applied. b. What was the actual overhead for the year? c. Give the journal entry to dispose of the factory overhead balance assuming it is written off to the cost of goods sold. d. Give the journal entry to dispose of the factory overhead balance assuming it is allocated among work in process, finished goods, and cost of goods sold based on ending balances. e. Which method of disposing of under- or overapplied factory overhead cost is more accurate? Explain.
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