PROBLEM 7: The following information is taken from the accounts of Latin Company. The entries in the T-accounts are summaries of the transactions that affected those accounts during the year.

Required:

Identify reasons for entries (a) through (d).

Assume that the underapplied or overapplied overhead is closed to Cost of Goods Sold. Prepare the necessary journal entry.

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. Provide supporting computations.

Manufacturing Overhead Work in Process 460,000 (b) 70,000 Bal 15,000(c) 710,000 Bal .90000 260,000 85,000 390,000 Bal Cost of Goods Sold Bal (cl) Finished Goods 50,000 (d) 20,000 640,000 640,000