Exercise 3-8 (Algo) Applying Overhead; Journal Entries; Disposing of Underapplied or Overapplied Overhead [LO3-1, LO3-2, LO3-4] The following information is taken from the accounts of Latta Company. The entries in the T-accounts are summaries of the transactions that affected those accounts during the year. Manufacturing Overhead Credit Debit (a) Balance 465,408 (b) 77,568 Cost of Goods Sold Debit Credit 644,000 387,840 Debit Balance $ 20,160 58,560 309,120 $ 387,840 Work in Process (b) Balance 19,160 (c) 267,000 86,000 387,840 42,000 Credit 718,000 Debit Balance (c) Balance Finished Goods 48,000 (d) 718,000 122,000 Credit (d) The overhead that had been applied to production during the year is distributed among Work in Process, Finished Goods, and Cost of Goods Sold as of the end of the year as follows: 644,000 Work in Process, ending Finished Goods, ending Cost of Goods Sold Overhead applied For example, of the $42,000 ending balance in work in process, $20,160 was overhead that had been applied during the year. Required: 1. Identify reasons for entries (a) through (d). 2. Assume that the underapplied or overapplied overhead is closed to Cost of Goods Sold. Prepare the necessary journal entry. 3. Assume that the underapplied or overapplied overhead is closed proportionally to Work in Process, Finished Goods, and Cost of Goods Sold. Prepare the necessary journal entry.

xercise 3-8 (Algo) Applying Overhead; Journal Entries; Disposing of Underapplied or Overapplied Dverhead [LO3-1, LO3-2, LO3-4] The following information is taken from the accounts of Latta Company. The entries in the T-accounts are summaries of the ransactions that affected those accounts during the year. The overhead that had been applied to production during the year is distributed among Work in Process, Finished Goods, and Cost of Goods Sold as of the end of the year as follows: For example, of the $42,000 ending balance in work in process, $20,160 was overheod that had been applied during the year: Required: 2. Identify reasons for entries (a) through (d). 2. Assume that the underapplied or overapplied overhead is closed to Cost of Goods Sold. Prepare the necessary journal entry, 3. Assume that the underapplied or overapplied overhead is closed proportionally to Work in Process, Finished Goods, and Cost of Goods Sold. Prepare the necessary journal entry