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 Work in Process Finished Goods Debit Credit Debit Credit Debit Credit (a) Balance 476,928 (b) 79,488 397,440 Balance 14,560 (c) 738,000 Balance 284,500 (c) 88,500 Balance 43,000 (d) 738,000 127,000 654,000 (b) 397,440 Balance 47,000 Cost of Goods Sold Debit Credit (d) 654,000 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: Work in Process, ending Finished Goods, ending Cost of Goods Sold Overhead applied $ 22,560 60,960 313,920 $ 397,440 For example, of the $47,000 ending balance in work in process, $22,560 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. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Identify reasons for entries (a) through (d). Entry Reason (a) (b) (c) (d) < Required 1 Required 2 >