Chapter 3, Problem 8E

Applying Overhead; Journal Entries; Disposing of Under applied or Over applied Overhead L03-1, L03-2,
L03-4
The following information is from the accounts of Latta Company. The entries in the T-accounts are summaries of the transactions that affected those accounts during the year.

The Overhead that had been applied to production during the year is distributed among work in Process, Finishing Goods and the cost of Goods Sold as of the end of the year follows:

1. Identify reasons for entries (a) through (d).
2. Assume that the under applied or over appliedoverhead is closed to Cost of Goals Sold Prepare the necessary journal entry.
3. Assume that the under applied or over appliedoverhead is closed proportionally to work in process. Finishing goods, and cost of goods soldPrepare the necessary journal entry. Provide supporting computation.