The following information is taken from the accounts of Latta Company. The entries in the T-accounts are summaries of th
Posted: Mon May 30, 2022 6:16 am
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.
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:
For example, of the $57,000 ending balance in work in process,
$27,360 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.
Company. The entries in the T-accounts are summaries of the
transactions that affected those accounts during the year.
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:
For example, of the $57,000 ending balance in work in process,
$27,360 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.