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At the end of the period, Carson Company had the following balances in selected accounts: Materials $ 80,000 Finished goods 190,000 Work in process 70,000
At the end of the period, Carson Company had the following balances in selected accounts:
Materials | $ 80,000 |
Finished goods | 190,000 |
Work in process | 70,000 |
Cost of goods sold | 1,000,000 |
Factory overhead | 30,000 |
Required:
(a) The factory overhead balance is relatively small; prepare the journal entry to close the factory overhead account assuming a debit balance. What does a debit balance mean? | |
(b) The factory overhead balance is relatively small; prepare the journal entry to close the factory overhead account assuming a credit balance. What does a credit balance mean? | |
Refer to the Chart of Accounts for exact wording of account titles. |
CHART OF ACCOUNTSCarson CompanyGeneral Ledger
ASSETS | |
110 | Cash |
121 | Accounts Receivable |
131 | Materials |
133 | Work in Process |
135 | Factory Overhead |
137 | Finished Goods |
141 | Supplies |
142 | Prepaid Expenses |
181 | Land |
190 | Factory Equipment |
191 | Accumulated Depreciation |
LIABILITIES | |
210 | Accounts Payable |
221 | Utilities Payable |
251 | Wages Payable |
EQUITY | |
311 | Common Stock |
340 | Retained Earnings |
351 | Dividends |
390 | Income Summary |
REVENUE | |
410 | Sales |
610 | Interest Revenue |
EXPENSES | |
510 | Cost of Goods Sold |
520 | Wages Expense |
531 | Insurance Expense |
532 | Utilities Expense |
533 | Office Supplies Expense |
560 | Depreciation Expense |
590 | Miscellaneous Expense |
710 | Interest Expense |
(a) The factory overhead balance is relatively small; prepare the journal entry to close the factory overhead account assuming a debit balance on December 31. | |
(b) The factory overhead balance is relatively small; prepare the journal entry to close the factory overhead account assuming a credit balance on December 31. | |
Refer to the Chart of Accounts for exact wording of account titles. |
PAGE 1
JOURNAL
DATE | DESCRIPTION | POST. REF. | DEBIT | CREDIT | |
---|---|---|---|---|---|
1 |
| ||||
2 |
| ||||
3 |
| ||||
4 |
|
|
What does a debit balance mean? A debit balance indicates that the factory overhead was . What does a credit balance mean? A debit balance indicates that the factory overhead was .
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