Problem 2:

Roberts Manufacturing had a remaining debit balance of $20,000 of in its under and over-applied factory overhead account at year-end. It also had year end balances in the following accounts:

Work in Process. $20,000

Finished Goods30,000

Cost of Goods Sold50,000

Total $100,000

1.Prepare the closing entry for the $20,000 of under-applied overhead, assuming that the balance is not considered to be material.

2.Prepare the closing entry for the $20,000 of under-applied overhead, assuming that the balance is considered to be material.