Chapter 4, Problem 18P

Phillips Products, Inc. had a remaining credit balance of $10,000 in its under- and overapplied factory overhead account at year-end. It also had year-end balances in the following accounts:

Required:

1. 1. Prepare the closing entry for the $10,000 of overapplied overhead, assuming that the balance is not considered to be material.
2. 2. Prepare the closing entry for the $10,000 of overapplied overhead, assuming that the balance is considered to be material.