Michael Paints has two processes—Coloring Department and Mixing Department. Michael sold 350 gallons on account at $110 per gallon. The total cost of processing was $385,000 for 5,500 gallons of paint. Throughout the year, Michael used a predetermined overhead allocation rate to allocate $75,000 and $65,000 of indirect costs to the Coloring Department and Mixing Department, respectively. The actual overhead cost incurred amounted to $150,000 at the end of the year.

Record the necessary journal entries for the sale of goods and for adjustment of over/under-allocated manufacturing overhead at the end of the year.