Closing under- and overapplied overhead at year-end Waco Products Inc. had a remaining...

Closing under- and overapplied overhead at year-end

Waco Products Inc. had a remaining debit balance of $20,000 in its under- and overapplied factory overhead account at yearend. It also had year-end balances in the following accounts:

Required:

1. Prepare the closing entry for the $20,000 of underapplied overhead, assuming that the balance is not considered to be material.

2. Prepare the closing entry for the $20,000 of underapplied overhead, assuming that the balance is considered to be material.