Question

Exercise 3-8 Applying Overhead; Journal Entries; Disposing of Underapplied or Overapplied Overhead LO3-1, LO3-2, LO3-4] 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 Work in Process Finished Goods 45,000 (d) 16,400 (c) 87,500 45,000 393,600 Bal. 730,000 Bal. 650,000 Bal. 78,720 277, 500 Bal. 125,000 (b Bal. 393,608 Cost of Goods Sold 650,000 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 $ 21,600 60,000 312,000 $ 393,600 Overhead applied For example, of the $45,000 ending balance in work in process, $21,600 was overhead that had been applied during the year.

Answer 1

a	Manufacturing overheads	472320
	Accounts payable		472320
b	Work in process inventory	393600
	Manufacturing overheads		393600
c	Finished goods inventory	730000
	Work in process inventory		730000
d	Cost of goods inventory	650000
	Finished goods inventory		650000
1	Cost of goods sold	78720
	Manufacturing overheads		78720
2	Work in process	4320
	Finished goods	12000
	Cost of goods sold	62400
	Manufacturing overheads		78720