Required information

Problem 19-2A Source documents, journal entries, overhead, and financial reports LO P1, P2, P3, P4

[The following information applies to the questions displayed below.] Bergamo Bay's computer system generated the following trial balance on December 31, 2017. The companys manager knows something is wrong with the trial balance because it does not show any balance for Work in Process Inventory but does show a balance for the Factory Overhead account. In addition, the accrued factory payroll (Factory Payroll Payable) has not been recorded.

	Debit	Credit
Cash	$68,000
Accounts receivable	43,000
Raw materials inventory	26,500
Work in process inventory	0
Finished goods inventory	9,000
Prepaid rent	3,000
Accounts payable		$10,600
Notes payable		13,600
Common stock		30,000
Retained earnings		76,000
Sales		184,300
Cost of goods sold	102,000
Factory overhead	26,000
Operating expenses	37,000
Totals	$314,500	$314,500

After examining various files, the manager identifies the following six source documents that need to be processed to bring the accounting records up to date.

Materials requisition 21-3010:	$4,600	direct materials to Job 402
Materials requisition 21-3011:	$7,700	direct materials to Job 404
Materials requisition 21-3012:	$2,100	indirect materials
Labor time ticket 6052:	$6,000	direct labor to Job 402
Labor time ticket 6053:	$10,000	direct labor to Job 404
Labor time ticket 6054:	$3,000	indirect labor

Jobs 402 and 404 are the only units in process at year-end. The predetermined overhead rate is 150% of direct labor cost.

Problem 19-2A Part 2

2.1 Determine the revised balance of the Factory Overhead account after making the entries in part 1 using T-accounts. Determine whether there is any under- or overapplied overhead for the year.

2.2 Prepare the adjusting entry to allocate any over- or underapplied overhead to Cost of Goods Sold, assuming the amount is not material.