Exercise 3-8 (Algo) Applying Overhead; Journal Entries; Disposing of Underapplied or Overapplied Overhead [LO3-1, LO3-2, LO3-4) Work in Process The following information is taken from the accounts of Lotta Company. The entries in the T-accounts are summaries of the transactions that affected those accounts during the year. Manufacturing Overhead Finished Goods 463.104 (b) 385, 920 Dal. 20,080(e) 714,000 Bal. 49,000 (d) 642,000 Bal. 77,104 263,500 (0) 714,000 85,500 121,000 (b) 385.920 Bal. 41,000 Cost of Goods Sola (d) 642,000 The overhead that had been appled 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 Tinished Goods, anding Coat of Gooda Bold Overhead applied 19,680 58,000 300,260 $385,920 For example, of the $41,000 ending balance in work in process, $19,680 was overhead that had been applied during the year Required: 1. Identify reasons for entries (@) through (d). Required: 1. Identify reasons for entries (a) through (d). 2. Assume that the underapplied or overopplled 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 Assume that the underapplied or overapplied overhead is closed to cost of Goods Sold. Prepare the necessary Journal entry. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction ist Journal entry worksheet Record the adjustment of manufacturing overhead account to COGS. Note: Enter debits before credits Event Debit Credit General Journal Cost of goods sold Manufacturing overhead Record entry Clear entry View general Journal Required Required 2 Required 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. (If no entry is required for a transaction/event, select "No journal entry required in the first account held. Do not round Intermediate calculations.) View transaction list Journal entry worksheet Record the allocation of any balance in the manufacturing overhead account to other accounts. Note: Enter debits before credits Event General Journal Debit Credit 1