Latta Company provided the following T-accounts for this year. Manufacturing Overhead Debit Credit (a) 488,448 (b) 407,040 Balance 81,408 Work in Process Debit Credit Balance 9,960 (c) 758,000 302,000 91,000 (b) 407,040 Balance 52,000 Finished Goods Debit Credit Balance 38,000 (d) 664,000 (c) 758,000 Balance 132,000 Cost of Goods Sold Debit Credit (d) 664,000 The overhead applied to production is distributed among Work in Process, Finished Goods, and Cost of Goods Sold at the end of the year as follows: Work in Process, ending $ 24,960 Finished Goods, ending 63,360 Cost of Goods Sold 318,720 Overhead applied $ 407,040 For example, of the $52,000 ending balance in work in process, $24,960 was applied overhead. Required: Identify reasons for entries (a) through (d). Assume underapplied or overapplied overhead is closed to Cost of Goods Sold. Prepare the necessary journal entry. Assume underapplied or overapplied overhead is closed proportionally to Work in Process, Finished Goods, and Cost of Goods Sold. Prepare the necessary journal entry.
Latta Company provided the following T-accounts for this year.
Manufacturing
Debit Credit
(a) 488,448 (b) 407,040
Balance 81,408
Work in Process
Debit Credit
Balance 9,960 (c) 758,000
302,000
91,000
(b) 407,040
Balance 52,000
Finished Goods
Debit Credit
Balance 38,000 (d) 664,000
(c) 758,000
Balance 132,000
Cost of Goods Sold
Debit Credit
(d) 664,000
The overhead applied to production is distributed among Work in Process, Finished Goods, and Cost of Goods Sold at the end of the year as follows:
Work in Process, ending $ 24,960
Finished Goods, ending 63,360
Cost of Goods Sold 318,720
Overhead applied $ 407,040
For example, of the $52,000 ending balance in work in process, $24,960 was applied overhead.
Required:
Identify reasons for entries (a) through (d).
Assume underapplied or overapplied overhead is closed to Cost of Goods Sold. Prepare the necessary
Assume underapplied or overapplied overhead is closed proportionally to Work in Process, Finished Goods, and Cost of Goods Sold. Prepare the necessary journal entry.
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