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)	499,968	(b)	416,640
Balance	83,328

Work in Process
Debit		Credit
Balance	5,360	(c)	778,000
	319,500
	93,500
(b)	416,640
Balance	57,000

Finished Goods
Debit		Credit
Balance	33,000	(d)	674,000
(c)	778,000
Balance	137,000

Cost of Goods Sold
Debit		Credit
(d)	674,000

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	$ 27,360
Finished Goods, ending	65,760
Cost of Goods Sold	323,520
Overhead applied	$ 416,640

For example, of the $57,000 ending balance in work in process, $27,360 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.