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 Debit Credit (a) 497,664 (b) 414,720 Balance 82,944 Work in Process Debit Credit Balance 6,280 (c) 774,000 316,000 93,000 (b) 414,720 Balance 56,000 Finished Goods Debit Credit Balance 34,000 (d) 672,000 (c) 774,000 Balance 136,000 Cost of Goods Sold Debit Credit (d) 672,000 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 $ 26,880 Finished Goods, ending 65,280 Cost of Goods Sold 322,560 Overhead applied $ 414,720 For example, of the $56,000 ending balance in work in process, $26,880 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.

Exercise 3-8 (Algo) Applying Overhead; Journal Entries; Disposing of Underapplied or Overapplied Dverhead [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 ransactions that affected those accounts during the year. The overhead that had been applied to production during the year is distributed among Work in Process, Finished Goods, and Cost Goods Sold as of the end of the year as follows: Eor example, of the $56,000 ending balance in work in process, $26,880 was overhead that had been applied 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. 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