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)	465,408	(b)	387,840
Bal.	77,568

Work in Process
Bal.	19,160	(c)	718,000
	267,000
	86,000
(b)	387,840
Bal.	42,000

Finished Goods
Bal.	48,000	(d)	644,000
(c)	718,000
Bal.	122,000

Cost of Goods Sold
(d)	644,000

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	$	20,160
Finished Goods, ending		58,560
Cost of Goods Sold		309,120
Overhead applied	$	387,840

For example, of the $42,000 ending balance in work in process, $20,160 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.