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
(a)	481,536	(b)	401,280
Bal.	80,256

Work in Process
Bal.	12,720	(c)	746,000
	291,500
	89,500
(b)	401,280
Bal.	49,000

Finished Goods
Bal.	41,000	(d)	658,000
(c)	746,000
Bal.	129,000

Cost of Goods Sold
(d)	658,000

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	$	23,520
Finished Goods, ending		61,920
Cost of Goods Sold		315,840
Overhead applied	$	401,280

For example, of the $49,000 ending balance in work in process, $23,520 was overhead that had been applied during the year.

Required:

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

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

Entry	Reason
(a)
(b)
(c)
(d)

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

• Record the adjustment of manufacturing overhead account to COGS.

Note: Enter debits before credits.

Event	General Journal	Debit	Credit
1

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.

• Record the allocation of any balance in the manufacturing overhead account to other accounts.

Note: Enter debits before credits.

Event	General Journal	Debit	Credit
1