Data for Keiser Company are shown.

Transactions:
(a)		Factory overhead is applied at a rate of 80% of direct labor costs. At the end of the year, the direct labor costs associated with the jobs still in process totaled $7,000.
(b)		A physical count of factory supplies at the end of the year shows that $3,750 of factory supplies were used during the year.
(c)		A review of the insurance policy files shows that $4,360 of insurance on the factory building and equipment has expired.
(d)		Depreciation expense for the year on the factory building was $9,400 and on factory equipment was $11,600, a total of $21,000.
(e)		The factory overhead account has a debit balance of $146,700 and a credit balance of $143,200 [after recording adjustments (a) through (d)]. Use Cost of Goods Sold for this adjustment.

Required:

1.	Prepare the December 31 adjusting journal entries for Keiser Company.
2.	Was factory overhead underapplied or overapplied for the year?

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GENERAL JOURNAL

	DATE	ACCOUNT TITLE	POST. REF.	DEBIT	CREDIT
1		Adjusting Entries
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2. Was factory overhead underapplied or overapplied for the year?

by