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)	502,272	(b)	418,560
Balance	83,712

Work in Process
Debit		Credit
Balance	4,440	(c)	782,000
	323,000
	94,000
(b)	418,560
Balance	58,000

Finished Goods
Debit		Credit
Balance	32,000	(d)	676,000
(c)	782,000
Balance	138,000

Cost of Goods Sold
Debit		Credit
(d)	676,000

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	$ 27,840
Finished Goods, ending	66,240
Cost of Goods Sold	324,480
Overhead applied	$ 418,560

For example, of the $58,000 ending balance in work in process, $27,840 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.