Bergo Bay's accounting system generated the following account balances on December 31. The companys manager knows something is wrong with this list of balances because it does not show any balance for Work in Process Inventory, and the accrued factory payroll (Factory Wages Payable) has not been recorded.

	Debit	Credit
Cash	$ 78,000
Accounts receivable	47,000
Raw materials inventory	28,500
Work in process inventory	0
Finished goods inventory	6,000
Prepaid rent	2,000
Accounts payable		$ 9,200
Notes payable		12,200
Common stock		20,000
Retained earnings (prior year)		76,000
Sales		221,100
Cost of goods sold	111,000
Factory overhead	26,000
General and administrative expenses	40,000
Totals	$ 338,500	$ 338,500

These six documents must be processed to bring the accounting records up to date.

Materials requisition 10:	$ 4,500	direct materials to Job 402
Materials requisition 11:	$ 7,400	direct materials to Job 404
Materials requisition 12:	$ 2,200	indirect materials
Labor time ticket 52:	$ 7,000	direct labor to Job 402
Labor time ticket 53:	$ 13,000	direct labor to Job 404
Labor time ticket 54:	$ 5,000	indirect labor

Jobs 402 and 404 are the only jobs in process at year-end. The predetermined overhead rate is 100% of direct labor cost.

2-a. In Factory Overhead T-account, enter amounts from part 1 related to factory overhead. Determine the amount of over- or underapplied overhead.

2-b. Prepare the entry to close any over- or underapplied overhead to Cost of Goods Sold.