Question

The following information is taken from the accounts of Latta Company. The entries in the T-accounts are summaries of the transactions that affected those accounts during the year. Manufacturing Overhead 506,880) 422,400 Bal. 84,480 Bal. Work in Process 2,600 (c) 790,000 330,000 95,000 422,400 60,000 Bal. (e) Bal. Finished Goods 30,000 (d) 680,000 790,000 140,000 (b) Bal. es (d) Cost of Goods Sold 680,000 The overhead that had been applied to production during the year is distributed among Work in Process, Finished Goods, and Cost of Goods Sold as of the end of the year as follows: Work in Process, ending Finished Goods, ending Cost of Goods Sold Overhead applied $ 28,800 67,200 326,400 $ 422,400 For example, of the $60,000 ending balance in work in process, $28,800 was overhead that had been applied during the year. Required: 1. Identify reasons for entries (a) through (d). 2. Assume that the underapplied or overapplied overhead is closed to Cost of Goods Sold. Prepare the necessary journal entry. 5 of 6 !!! < Prev Next >

Answer 1

1) Identify

a) Actual manufacturing overhead

b) Applied manufacturing overhead

c) Cost of goods manufactured

d) Cost of goods sold

2) Adjusting entry

No	General Journal	Debit	Credit
	Cost of goods sold	84480
	Manufacturing overhead		84480

3) Adjusting entry

No	General Journal	Debit	Credit
	work in process (28800/422400*84480)	5760
	Finished goods	13440
	Cost of goods sold	65280
	Manufacturing overhead		84480