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) 472,320 (b) 393,600 Bal. 78,720 Work in Process Bal. 16,400 (c) 730,000 277,500 87,500 (b) 393,600 Bal. 45,000 Finished Goods Bal. 45,000 (d) 650,000 (c) 730,000 Bal. 125,000 Cost of Goods Sold (d) 650,000

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 $ 21,600 Finished Goods, ending 60,000 Cost of Goods Sold 312,000 Overhead applied $ 393,600

For example, of the $45,000 ending balance in work in process, $21,600 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