Chapter 4, Problem 19P

Nathan Industries had a remaining debit balance of $20,000 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 $20,000 of underapplied overhead, assuming that the balance is not considered to be material.
2. 2. Prepare the closing entry for the $20,000 of underapplied overhead, assuming that the balance is considered to be material.