Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The following information is taken from the accounts of Latta Company. The entries in the T - accounts are summaries of the transactions that affected

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)483,840(b)403,200
Balance 80,640
Work in Process
Debit Credit
Balance 11,800(c)750,000
295,000
90,000
(b)403,200
Balance 50,000
Finished Goods
Debit Credit
Balance 40,000(d)660,000
(c)750,000
Balance 130,000
Cost of Goods Sold
Debit Credit
(d)660,000
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 $ 24,000
Finished Goods, ending 62,400
Cost of Goods Sold 316,800
Overhead applied $ 403,200
For example, of the $50,000 ending balance in work in process, $24,000 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.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Principles And Practice Of Auditing

Authors: George Puttick, Sandra Van Esch

7th Edition

0702137723, 978-0702137723

More Books

Students also viewed these Accounting questions

Question

2 What is the philosophy of performance management?

Answered: 1 week ago